Question

Income Statement

For the year ended December​ 31, 2019

Sales Revenue	​$347,000
Cost of Goods Sold	​(78,000)
Gross Profit	​$269,000
Selling and Administrative Expenses	​(43,900)
Operating Income	​225,100
Gain on Sale of Equipment	​5,500
Net Income	​$230,600

All of the​ company’s sales are made on account. At the beginning of the​ year, the Accounts Receivable balance was​ $53,500. The balance had decreased to​ $50,200 by​ year-end.

All of the​ company’s inventory purchases are made on account. Accounts Payable consists solely of inventory purchases. At the beginning of the​ year, the Inventory balance was​ $60,400. By​ year-end, the balance had increased by​ $4,900. The net decrease in the Accounts Payable balance during the year was​ $1,100.

Included in Selling and Administrative Expenses are the​ following: depreciation expense of​ $12,300 and bad debt expense of​ $1,000. All cash operating expenses are paid when incurred.

What was the​ company’s 2019 net cash flows from operating​ activities?

Answer 1

Cash flow statement
Cash Flow from Operating Activities
Net Income		$2,30,600
Adjustment to reconcile net income to net
provided by operating activites
Gain on sale of Equipment	-$5,500
Depreciation expense	$12,300
Decrease in account receivable	$3,300
Increase in Inventory	-$4,900
Decrease in account payable	-$1,100	$4,100
Net Cash flow from operating Activites		$2,34,700