Question

Suppose Gulf Shipping Company has the following results related to cash flows for 2017: Net Income of $7,800,000 Decrease in Accounts Payable of $300,000 Increase in Accounts Receivable of $800,000 Depreciation of $1,200,000 Increase in Inventory of $900,000 Other Adjustments from Operating Activities of $700,000 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

Solution:

Statement of Cash Flows - Gulf Shipping
For year ended 2017
Particulars	Details (In thousands)	Amount (In thousands)
Cash Flow from Operating Activities:
Net Income		$7,800.00
Adjustments to reconcile net income to net cash provided by operations:
Depreciation Expense	$1,200.00
Increase in accounts receivables	-$800.00
Increase in inventory	-$900.00
Decrease in accounts payable	-$300.00
Other Adjustments	$700.00	-$100.00
Net Cash provided by operating activities (A)		$7,700.00
Cash flow from Investing activities (B)		$0.00
Cash flow from Financing activities ©		$0.00
Net Cash Flow (A+B+C)		$7,700.00

Net cash flow from operating activities = $7,700