Question

Use the income statement and the list of changes to answer the question.

Ruston Company Income Statement January 1 to December 31, 2017 (amounts in thousands)
Revenue	7,800
Cost of Goods Sold (COGS)	1,560
Gross Income	6,240
Sales, General, & Administrative Expenses (SG&A)	780
Depreciation Expense	700
Other Expenses	500
Earnings Before Interest & Taxes (EBIT)	4,260
Interest	70
Pre-Tax Income	4,190
Income Taxes	1,676
Net Income	2,514

Between January 1 and December 31, 2017:

1. Accounts Receivable increase by $600,000
2. Accounts Payable increase by $300,000
3. Gross Property, Plant, & Equipment increase by $8,300,000
4. Long Term Debt increases by $700,000

Assume no other changes

What is the Net Cash Flow?

Please specify your answer in the same units as the income statement.

Answer 1

The value of net cash flow is arrived as below:

Ruston Company
Cash Flow Statement
January 1 to December 31, 2017 (in 000's)
Cash Flow from Operating Activities
Net Income	2,514
Add Depreciation	700
Increase in Accounts Payable	300
Less Increase in Accounts Receivable	-600
Net Cash Flow from Operating Activities (A)	2,914
Cash Flow from Investing Activities
Increase in Property, Plant and Equipment	-8,300
Net Cash Flow from Investing Activities (B)	-8,300
Cash Flow from Financing Activities
Increase in Long Term Debt	700
Net Cash Flow from Financing Activities (C)	700
Net Cash Flow (A+B+C)	-$4,686