Question

In its statement of cash flows issued for the year ending December 31, Oxford Company reported a net cash inflow from operating activities of $123,000. The following adjustments were included in the supplementary schedule reconciling cash flow from operating activities with net income:

Depreciation $38,000
Increase in net accounts receivable 31,000
Decrease in inventory 27,000
Decrease in accounts payable 48,000
Increase in interest payable 12,000
Net income is:________.
a. $29,000
b. $41,000
c. $79,000
d. $217,000
e. $125,000

Answer 1

a. $29,000

Step-by-step explanation:

Calculation for the Net income

Using this formula

Net income=(-Depreciation+Increase in net accounts receivable-Decrease in inventory-

Decrease in accounts payable - Increase in interest payable) -Net cash inflow from operating activities

Let plug in the formula

Net Income= (–$38,000 + $31,000 – $27,000 –

$48,000 – $12,000) - $123,000

Net income=$94,000-$123,000

Net income =$29,000

Therefore Net income is $29,000