Question

Additional Information: Net income for 2020 was $26,890. Land was sold for cash at a loss of $2,000. Cash dividends were paid during the year. Equipment was purchased for cash. In addition, equipment costing $40,000 with a book value of $13,000 was sold for $14,000 cash. What is the cash flow from operating activities? Group of answer choices $85,290 $86,290 $108,290 $84,290

Answer 1

Answer:

The question is wrong ,find attached correct question:

The correct option in the attached is $58290 ,option E,which is missing in the original question

Explanation:

Cash flow from operating activities=net income+depreciation charge-increase in accounts receivable+decrease in inventory+decrease in prepaid expenses-decrease in accounts payable+loss on sale of land-gain on sale of equipment

cash flow from operating activities=$26,890+($135,000-$92,000)-($77,000-$64,000)+($140,000-$132,000)+($16,540-$12,140)-($45,000-$33,000)+$2000-$1000=$58290

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