Question

The income statement for Camire, Inc. appears below: Revenue $130,000 Cost of goods sold 50,000 Depreciation...

The income statement for Camire, Inc. appears below:

Revenue

$130,000

Cost of goods sold

50,000

Depreciation expense

32,000

Other operating expenses

8,000

Income tax expense

14,000

Net income

$ 26,000


During the year, Camire Inc.’s cash increased by $4,200, accounts receivable increased by $1,200, inventory decreased by $3,800, and accounts payable increased by $400.

How much is the company's cash flow from operations?

A.

$65,200
B.

$58,000
C.

$59,000
D.

$61,000
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Answer #1
Camire, Inc.
Cash flow from operating activities
Net income 26,000
Add: Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense 32,000
Changes in current operating assets and liabilities:
Accounts receivable increase -1,200
Inventory decrease 3,800
Accounts payable increase 400
Net cash provided by Operating Activities $61,000

The company's cash flow from operations = $61,000

Correct option is D.

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