Question

Hampton Industries had $61,000 in cash at year-end 2017 and $27,000 in cash at year-end 2018. The firm invested in property, plant, and equipment totaling $150,000. Cash flow from financing activities totaled +$150,000. Round your answers to the nearest dollar, if necessary.

Answer 1

Answer:

Cash flow from operating activities = ($34,000)

Explanation:

Cash flow statement has three levels of activity. These are-

a) Cash flow from operating activities;

b) Cash flow from investing activities;

c) Cash flow from financing activities;

By adding up those three activities, we can get the changes in cash at the end of the period. Or, we can find the cash amount which is shown in the Balance sheet.

Since, cash flow from investing and financing activities are given, we need to calculate the cash flow from operating activities.

We know, Cash flow from operating activities

+ Cash flow from investing activities

+ Cash flow from financing activities

= Changes in cash

Again, Changes in cash = Cash at the ending period - Beginning cash

Putting the values,

Cash flow from operating activities + ($150,000) + $150,000 = $27,000 - $61,000

Cash flow from operating activities = ($34,000)

Note: Brackets indicate "minus".