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Reil [10]
4 years ago
13

Given the following selected information on McMillen's Chocolate, Inc., calculate Cash Flow from Operating Activities for 2012.

Show your work.
2011 2012
EAT $ 600,000 800,000
Depreciation Exp. 100,000 120,000
Dividends 400,000 550,000
Accounts Receivable 1,500,000 1,000,000
Inventory 3,500,000 4,100,000
Accts. Payable 350,000 350,000
Accruals 250,000 200,000
Long-Term Debt 2,300,000 2,000,000
Common Stock 2,200,000 3,000,000
Interest expenses 50,000 60,000
Retained Earnings 6,150,000 6,400,000
Business
1 answer:
Jet001 [13]4 years ago
6 0

Answer:

Cash flow from operating activities for the Year 2012 = $770000.

Explanation:

Particulars                                                                    Amount ($)

Earnings after tax (EAT)                                               800,000

+ Depreciation (Non-cash expenditure)                      <u>120,000</u>  

Operating profit before working                                  920,000

capital changes

+ Decrease in accounts receivable                             500,000

(1,500,000 - 1,000,000)  

- increase in inventory                                                  600,000

(4,100,000 - 3,500,000)

- Decrease in accrual                                                     <u>50,000</u>

(250,000 - 200,000)  

Cash flow from operating activities                            <u>770,000</u>

Conclusion:- Cash flow from operating activities for the Year 2012 = $770000.

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