Question

Innovative Products reported net income of $205,000. Beginning and ending inventory balances were $40,000 and $45,000, respectively. Accounts payable balances at the beginning and end of the year were $35,000 and $33,000, respectively. Assuming that all relevant information has been presented, the company would report net operating cash flows of:A. $202,000B. $198,000C. $212,000D. $205,000

Answer 1

Answer:

= $198,000

Explanation:

A Cash flow statement records the movement of cash asset in an organization. It monitors the inflows and outflow of money in a financial year.

For innovative products:

Cash  from net income: $ 205,000.00

Increase in inventory

($45,000-$40,000)  $5,000.00

Accounts payables

($33,000-$35,000)     ( $2, 000.00 )

Net operating cash flow= $205,000-$5000- $2000

     = $198,000