Question

In 2018, Usher Sports Shop had cash flows from investing activities of ($2,150,000) and cash flows from financing activities of ($3,219,000). The balance in the firm's cash account was $980,000 at the beginning of 2018 and $1,025,000 at the end of the year. Calculate Usher Sports Shop's cash flow from operations for 2018.

Answer 1

Answer:

Usher Sports Shop's cash flow from operations for 2018: $5,414,000

Explanation:

Cash at the end of the year = Cash at the beginning of the year + Cash flows from investing activities + Cash flows from financing activities + Cash flows from operating activities

Therefore:

Cash flows from operating activities = Cash at the beginning of the year + Cash flows from investing activities + Cash flows from financing activities - Cash at the end of the year

Cash flows from investing activities of ($2,150,000) <0 and cash flows from financing activities of ($3,219,000) <0.

Cash flows from operating activities = -$980,000 + $2,150,000 + $3,219,000 + $1,025,000 = $5,414,000