Question

The following information relates to Grass Co for the years ended 31 December 20X1 and 20X2: 20X1 $ 20X2 $ Profit before tax 24,000 18,000 Trade receivables 135,000 129,000 Trade payables 112,000 101,000 Inventory 76,000 67,000 Income tax paid 8,000 4,500 What is Grass Co's net cash from operating activities for the year ended 31 December 20X2?

$22,000

$9,500

$17,500

$20,000

Answer 1

Cash flow from Operating Activities
Net Income		$          13,500
Adjustments
Decrease in Accounts Receivable	$            6,000
Decrease in Inventory	$            9,000
Decrease in Accounts payable	$         (11,000)
Total Adjustments		$             4,000
Net Cash from operating activities		$          17,500

Answer is d. $17500