Question

Kela Corporation reports a net income of $450,000 that includes a depreciation expense of $70,000. Also, cash of $50,000 was borrowed on a 5-year note payable. Based on this data, the total cash inflows from operating activities are:
a. $380,000.
b. $470,000.
c. $520,000.
d. $570,000.

Answer 1

Answer:

option (c) $520,000

Explanation:

Data provided in the question:

Net income = $450,000

Depreciation expense = $70,000

Amount borrowed = $50,000

Now,

Here out of the given transactions, the amount borrowed is a financing activity.

Therefore,

The  total cash inflows from operating activities

= Net income + Depreciation expense

= $450,000 + $70,000

= $520,000

Hence,

The correct answer is option (c) $520,000