Question

Assuming Net Income for the year is $245,000, what is the net cash flows from operating activities given the following information: Increase in Salaries Payable $ 17,000 Depreciation Expense $ 5,500 Increase in Prepaid Rent $ 27,500 Loss on sale of asset $ 1,400 Increase in Accounts Payable $ 28,000 Increase in Inventory $ 64,000

Answer 1

$205,400

Step-by-step explanation:

Calculation for the net cash flows from operating

activities

Net Income$245,000

Adjustments of net income to net cash flows from operating activities:

Depreciation Expense 5,500

Loss on sale of asset 1,400

Increase in Salaries Payable 17,000

Less Increase in Prepaid Rent(27,500)

Increase in Accounts Payable 28,000

Less Increase in Inventory(64,000)

Net operating cash flows$205,400

Therefore the net cash flows from operating

activities will be $205,400