Question

     For the year ended Dec 31, 2019, Omni Company reported net income of $73,650; depreciation expense increased of $3,300, and recognized $6,700 loss on disposal of equipment.

In addition, current operating assets and liabilities from the company’s comparative balance sheet were as follows:

Dec 31, 2019                  Dec 31, 2018       

Accounts Receivable                             $5,600                          $4,635

Inventory                                             $7,300                          $4,500

Accounts Payable                                  $6,750                          $3,455             

Based upon above information, please generate cash flows from operation activities in 2018.

Cash flows from operating activities:
Net Income	$73,650
Adjustments to reconcile net income to net cash flow from operating activities
Depreciation	$__________
Loss on Disposal of Equipment	$__________
Changes in current operating assets and liabilities (Put “increase/decreased of current asset or current liability account”)
?_________________________	$__________
?_________________________	$__________
? _________________________	$__________

Net Cash Flow from Operating Activities                                                  $___________

Answer 1

Ans:

Particulars	Amount($)
Net income	$73,650
Adjustments to reconcile net income to net cash flow from operating activities
Add: Depreciation Expense	$3,300
Add: Loss on disposal of equipment	$6,700
Change in current operating assets and liabilities
Add:Increase in accounts payable(6750-3455)	$3295
Less::Increase in inventory(7300-4500)	($2800)
Less:increase in accounts receivable(5600-4635)	(965)
Net cash flow from operating activities	$83,180