Question

Stuart Company had Net Income for 2019 of $8,100,000. The firm invested $1,000,000 in manufacturing equipment during 2018 but made no additional capital investments in 2019. The equipment is being depreciated over five years using straight-line depreciation, starting in 2018. Assuming no other adjustments to cash flow than those mentioned here, create a statement of cash flows for 2019 with amounts in thousands. What is the Net Cash Flow in 2019

Answer 1

.....................................................Stuart Company.......................................

.......................................Statement of Cash Flows ....................................

........................................For the year ended 2019...................................

Cash Flow from Operating Activities:

Net Income........................................................................$8,100,000

Add Depreciation Expense.................................................$200,000

Net Cash provided (used) by operating activities: ......$8,300,000

Cash Flow from Investing Activities:

Purchase of manufacturing equipment ...........................-$1,000,000

Net Cash provided (used) in Investing activities.............-$1,000,000

Cash Flow from Financing Activities:....................................$0.00

Net cash flow in 2019 ...........................................................$7,300,000

Depreciation of equipment;

= Cost / Useful term

= 1,000,000 / 5

= $200,000