Question

An analyst compiled the following information for U Inc. for the year ended December 31, 2018: Net income was $1,700,000. Depreciation expense was $400,000. Interest paid was $200,000. Income taxes paid were $100,000. Common stock was sold for $200,000. Preferred stock (8% annual dividend) was sold at par value of $250,000. Common stock dividends of $50,000 were paid. Preferred stock dividends of $20,000 were paid. Equipment with a book value of $100,000 was sold for $200,000. Using the indirect method, what was U Inc.'s net cash flow from operating activities for the year ended December 31, 2018?

Answer 1

Net cash from operating activities=$2,100,000

Step-by-step explanation:

The net cashflow from operating activities represent how much a business generates doing its ordinary course of business.

It is the net income adjusted for all non-cash items like depreciation e.t.c

Net cash from operating activities = 1,700,000 + 400,000= $2.100,000

Net cash from operating activities=$2,100,000