Question

Company reported 2018 net income of $9 million and depreciation of $3.5 million. The top part...

Company reported 2018 net income of $9 million and depreciation of $3.5 million. The top part of the Company’s 2017 and 2018 balance sheets is listed as follows (in millions of dollars).

                                                                2017      2018                  

Current assets:                                                                                                                                                                       

   Cash                                                       $18                 $30  

   Accounts receivable                                 20                   24   

   Inventory                                                  10                   11      

               Total Current Assets:                  $48                 $65

Current Liabilities:

Accrued wages and taxes                    $    5                $11

Accounts payable                                     25                  29                   

Other Accrued Liabilities                          18                  25                     

                 Total Current Liabilities:           $48                $65           

What is the 2018 net cash flow from operating activities for the Company? (Display the answer as noted below - If you calculated the answer as being $12.3 million, input the answer in the following format  12.3)

Homework Answers

Answer #1

Answer- The 2018 net cash flow from operating activities for the Company is = $24.5 million.

Explanation-

STATEMENT OF CASH FLOWS PARTIAL (USING INDIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31,2018
Particulars Amount
$ in millions
Cash flow from operating activities
Net Income 9
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation expenses 3.5
Change in operating assets & liabilities
Increase in accounts receivable -4
Increase in inventory -1
Increase in accounts payable 4
Increase in accrued wages & taxes 6
Increase in other accrued liabilities 7
Net cash flow from operating activities 24.5
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