Question

Following are partial balance sheet data for Delloi Ltd, as at December 31, 20x2 and 20x1, and the partial income statement for the year ended December 31, 20x2: Balance Sheet 20x2 20x1 Accounts receivable Inventory $44738 $20104 $11464 $48005 Income Statement Revenue Net Income Depreciation Expense $501787 $106117 $26411 Which of the following total amounts would appear in the cash flow from operating section of the statement of cash flows: Select one: a. $99254 b. $160429 c. $127155 d. $100744

Please show all steps so I can fully understand how to solve. thank you

Answer 1

cash flow statement determines the changes in cash during the year

it is bifurcated into three categories (1) cash flow from operating activities (2) cash flow from financing activities (3) cash flow from investing activities

cash flow from operating activities starts from net income it adds non cash expenses like depreciation , gain /Loss on sale of asset. Increase in asset is deducted and decrease in asset is added back. increase in liability is added and decrease in liability is reduced.

cash flow from operating activities
Net income	$106,117
Add: depreciation	$26,411
Less: Increase in account receivable [11464-44738]	($33,274)
Add: decrease in inventory [48005-20104]	$27,901
Cash flow from operating activities [106117+26411-33274-27901]	$127,155

There is increase in account receivable from 2011 to 2012 so it will be deducted

There is decrease in inventory from 2011 to 2012 so it will be added.