Answer:
The question is incomplete, below is the completed question:
Lense Laboratories' net income was $250,000. Given the account information below, what is the net operating cash flows for Lense Laboratories?
Increase In Accounts Receivable...$60,000
Increase In Salaries Payable...$50,000
Decrease In Inventory...$30,000
Depreciation Expense...$45,000
Increase In Prepaid Insurance...$3,000
a. $152,000.
b. $278,000.
c. $312,000.
d. $438,000.
The correct answer is:
$312,000 (c.)
Explanation:
operating cash flow is the number of cash generated by a business' regular operating activities within a specific time period.
The formula for net operating cash flow is as follows:
Operating cash flow = Net income + Non-cash expenses - increase in working capital
Net income = $250,000
Non-cash expenses = increase in salary payable + decrease in inventory + depreciation in expenses
Non-cash expenses = 50,000 + 30,000 + 45,000 = $125,000
increase in working capital = increase in accounts receivable + increase in prepaid insurance
increase in working capital = 60,000 + 3,000
increase in working capital = $63,000
∴ Operating cash flow = 250,000 + 125,000 - 63,000 = $312,000
Cash flow from activities = $312,000
