Answer:
1. c. Operating cash flow = 50,000
2. b. Net income=$115,000
Explanation:
1. The Cashflow for the year is calculated by adding the balances from the Financing, Investing and Operating Activities in the following manner;
Cash Flow for the year = Opening Balance + Operating Activities + Investing Activities + Financing Activities
Operating Activities = Cash Flow - Opening Balance - Investing Activities - Financing Activities
= 25,000 - 55,000 - (-250,000) - 170,000
= $50,000
2. Net Income is calculated from Operating Activities in the following manner;
Net Income = Operating Cashflow + Increase in Inventory - Increase in Accruals - Depreciation
= 50,000 + 100,000 - 25,000 - 10,000
= $115,000
