Answer:
cash flow provided by operation 260,000
Explanation:
net income 200,000
adjustment for non-monetary terms: (A)
depreciation expense 60,000
loss on sale of land 15,000
adjusted net income 275,000
Change in working capital:
decrease in AR 30,000
Decrease in AP (45,000) (B)
net change in WC: (15,000) (C)
cash flow provided by operation 260,000
(A) we must focus on cahs movement so the depreciation and loss on sale which are non-mentary term. This are not related to cash
(B) the decrease in account receivable means we colelct from our customer more.
(C) the decrease in accounts payable represent we use more cash to pay up the suppliers
