Answer:
The amount of net cash from operating activities for 2019 is <u>$210,000</u>.
Explanation:
Cash flows from operating activities refers to the section of the statement of cash flow that reveal the sources and utilization of cash got from ongoing normal business activities of a company in particular period.
Items that usually found under cash flows from operating activities are net income from the income statement, adjustments to reconcile net income, and changes in working capital.
The amount of net cash from operating activities for 2019 can be determined by preparing a statement of cash flow for operating activities only as follows:
Statement of cash flows
(Operating activities section only)
For the year ended 2019
<u>Details Amount ($) </u>
Net income 155,000
Adjustment to reconcile net income:
Depreciation expense 25,000
Changes in working capital:
<u>(Increase) decrease in current assets</u>
Accounts Receivable ($80,000 - $100,000) 20,000
Inventory ($70,000 - $50,000) (20,000)
Prepaid Expenses ($75,000 - $100,000) 25,000
<u>Increase (decrease) in current liabilities</u>
Accounts Payable ($110,000 - $100,000) 10,000
Deferred Revenue ($70,000 - $85,000) <u> (15,000) </u>
Net cash from operating activities <u> 210,000 </u>
