Financial and Managerial Accounting: Information for Decisions
Financial and Managerial Accounting: Information for Decisions
6th Edition
ISBN: 9780078025761
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 12, Problem 1MCQ
To determine

Introduction:

Cash Flow from Operating Activity: Cash flow from operating activities refers to the cash inflow and out flow from the operating activity of the company. Operating activity of the company refers to the activities involved in day to day operations of the business.

To identify:

Amount of the operating activity.

Expert Solution & Answer
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Explanation of Solution

‘Option b’ is the correct answer.

Calculate cash flow from operating activity.

Given,
Net income is $15,200.
Deprivation is $10,000.
Gain on sale of land is $3,000.
Increase in inventory is $1500.
Increases in account payable $2,850.

Cash flow from operating activities Amount$
Net income 15,200
Depreciation 10,000
Gain on sale of land (3000)
Increase in inventory (1500)
Increase in account payable 2,850
Net cash from operating activities 23,550

Hence, net cash from operating activities is $23,550.

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Chapter 12 Solutions

Financial and Managerial Accounting: Information for Decisions

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