Question

Question 29 2pts Chapin Company reported net income of $410,000 for 2018. Balances of selected current asset and current liability accounts are as shown on the indicated dates: Jan.1, 2018 Dec. 31, 2018 Accounts receivable $60,000 $69,400 Inventory $130,000 $141,000 Accounts payable $54,000 $48,000 Depreciation expense for 2018 amounted to $65,000. Using only the above information, compute Chapin's net cash flow from operating activities (indirect method) for 2018. $470,600 $460,600 $467,400 $448,600

Answer 1

Calculate the requirements as follows: B Amount 4,10,000 $ $ 65,000 Particulars 2 Net Income 3 Add: Non-Cash Expenses 4 Depreciation 5 Adjustment to reconcile net income to net cash flow from operating activities 6 Less: Increase in accounts receivables 7 Less: Increase in inventory 8 Less: Decrease in accounts payable 9 Net cash flow from operating activities $ $ $ $ -9,400 -11,000 -6,000 4,48,600 Hence, last option is the correct option. Calculations: Amount 410000 65000 Particulars 2 Net Income 3 Add: Non-Cash Expenses 4 Depreciation 5 Adjustment to reconcile net income to net cash flow from operating activities 6 Less: Increase in accounts receivables 7 Less: Increase in inventory 8 Less: Decrease in accounts payable 9 Net cash flow from operating activities =60000-69400 =130000-141000 =48000-54000 =SUM(B2:B8)