Question

Suppose Torche Corporation has the following results related to cash flows for 2019:

Net Income of $10,000,000
Increase in Accounts Payable of $800,000
Increase in Accounts Receivable of $600,000
Depreciation of $1,600,000
Decrease in Inventory of $100,000
Other Adjustments from Operating Activities of $1,000,000

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?

Note: Financial results are provided in dollars but the income statement units are thousands of dollars.

Please specify your answer in the same units as the statement of cash flows (i.e., enter the number from your completed statement of cash flows).

Answer 1

Answer:

Cash flows from Operating activities:
Net income		$10,000,000
Adjustments:
Depreciation	$1,600,000
Increase in Accounts Receivable	($600,000)
Decrease in Inventory	$100,000
Increase in Accounts Payable	$800,000
Other Adjustments from Operating Activities*	$1,000,000	$2,900,000
Net cash flow from operating activities		$12,900,000

*Assumed that Other adjustments from operating activities are loss on sale of assets.

Note: If you assume Other adjustments from operating activities are gain on sale of assets then you can subtract.