Question

The Hamada Company sales for 2016 totaled $151,000 and purchases totaled $87,000. Selected January 1, 2016, balances were: accounts receivable, $18,600; inventory, $14,300; and accounts payable, $10,800. December 31, 2016, balances were: accounts receivable, $15,900; inventory, $18,300; and accounts payable, $14,800. Net cash flows from these activities were:______________a) $86,600.b) $74,700.c) $64,000.d) $70,700.

Answer 1

Hi, there is missing / no correct options on this question.

The Answer is $66,600

The Activities that occurred are purely Operating Activities because they are transactions which happen within the trading course of business. So the question in other words is requesting us to determine Cash flows from Operating Activities.

Cash flows from Operating Activities

Net Income ($151,000 - $87,000) $64,000

Adjustment for Changes in Working Capital

Decrease in Accounts Receivable ($18,600 - $15,900) $2,700

Increase in Inventory ($18,300 - $14,300) ($4,000)

Increase in accounts payable ($14,800 - $10,800) $4,000

Net Cash from Operating Activities $66,600