Question

The following information are offered to you for X Company Account Name 2019 2018 Cash $...

The following information are offered to you for X Company

Account Name

2019

2018

Cash

$ 70,500

$50,300

Accounts Receivable

40,500

48,500

Marketable Securities

6,000

10,000

Inventory

65,000

50,000

Accounts payable

$ 65,000

$ 55,000

Salaries Payable

3,900

7,900

Other information:

·         Net income at the end of 2019 is $50,000.

·         Depreciation expense of 2019 is $15,000.

·         A Truck with a cost of $18,000 and a net book value of $7,000 was sold during 2019 at $5,000.

Using indirect method, the net cash flow from operating activities will be:

Select one:

a. $60,000

b. $66,000

c. All answers are wrong

d. $70,000

e. $20,000

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Homework Answers

Answer #1

Solution :

Note : Sale of Marketable Securities which are non Trading is shown in Investion Activity.

Therefore Option (b) i.e $66,000 is the correct Option for Cash flow from Operating activities.

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