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fredd [130]
3 years ago
11

Laser World's income statement reported total revenues of $860,000 and total expenses (including $40,500 depreciation) of $740,0

00. The balance sheet reported the following: Accounts Receivable—beginning balance, $54,000 and ending balance, $57,500; Accounts Payable—beginning balance, $27,500 and ending balance, $33,500. Therefore, based only on this information, the net cash flows from operating activities were:
Business
1 answer:
9966 [12]3 years ago
3 0

Answer:

the net cash flows from operating activities were: $163,000.

Explanation:

Prepare the Operating Activities Section of the Cash Flow Statement as follows :

<u>Cash flow from Operating Activities</u>

Net Income ( $860,000 - $740,000)                                 $120,000

<em>Adjustment of Non-cash items :</em>

Depreciation                                                                          $40,500

<em>Adjustment for Changes in Working Capital items :</em>

Increase in Accounts Receivable ($57,500 - $54,000)      ($3,500)

Increase in Accounts Payable ($33,500 - $27,500)             $6,000

Net Cash From Operating Activities                                   $163,000  

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