Question

Ruston Company Income Statement January 1 to December 31, 2017 (amounts in thousands) 7,800 1,560 6,240 780 700 500 4,260 70 4,190 1,676 2,514 Revenue Cost of Goods Sold (COGS) nl Gross Income Sales, General, & Administrative Expenses (SG&A) Depreciation Expense Other Expenses Earnings Before Interest & Taxes (EBIT) Interest Pre-Tax Income Income Taxes Net Income Between January 1 and December 31, 2017:
1. Accounts Receivable increase by $600,000
2. Accounts Payable increase by $300,000
3. Gross Property, Plant, & Equipment increase by $8,300,000
4. Long Term Debt increases by $700,000 Assume no other changes What is the Net Cash Flow?

Answer 1

Answer:

The Net Cash Flow is -$4,686,000.

Explanation:

Note: The data in this question are merged. The complete question with the sorted data are therefore provided before answering the question. See the attached pdf file for the complete question with the sorted data.

The explanation of the answers is now provided as follows:

Net Cash Flow can be determined by preparing the cash flow statement as follows:

Ruston company

Cash Flow Statement

For the Year Ended December 31, 2017

Details                                                                  $’000               $’000  

Cash Flows from Operating Activity

Net Income                                                           2,514

Adjustment to net income

Depreciation expense                                           700

Increase in accounts receivable                         (600)

Increase in accounts payable                               300

Net Cash Flows from Operating Activity                                    2,914

Cash Flows from Investing Activity  

Increase in Gross Property, Plant, & Eq.          (8,300)

Net Cash Flows from Investing Activity                                    (8,300)

Cash Flows from Financing Activity  

Increase in Long Term Debt                                  700

Net Cash Flows from Financing Activity                                       700  

Net Cash Flow                                                                            (4,686)  

Therefore, the Net Cash Flow is -$4,686,000.

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