Question

Suppose Lightspeed Industries has the following results related to cash flows for 2017:

Net Income of $8,800,000
Increase in Accounts Payable of $900,000
Decrease in Accounts Receivable of $300,000
Depreciation of $1,700,000
Increase in Inventory of $400,000
Other Adjustments from Operating Activities of $800,000

Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with amounts in thousands.

What is the Net Cash Flow from Operating Activities?

Please specify your answer in the same units as the statement of cash flows.

Answer 1

Net Cash Flow from Operating Activities = $10500000

Explanation;

Net cash provided or used by operating activities will be calculated as follow;

Statement of Cash Flows
Net income	$8800000
Add: Depreciation expense	$1700000
Add: Decrease in accounts receivable	$300000
Less: Increase in merchandise inventory	($400000)
Add: Increase in accounts payable	$900000
Less: Other adjustments from operating activities	($800000)
Net cash provided by operating activities	$10500000