Ask Question
12 August, 14:21

Hampton Industries had $39,000 in cash at year-end 2015 and $11,000 in cash at year-end 2016. The firm invested in property, plant, and equipment totaling $210,000. Cash Flow from financing activities totaled + $120,000.

A) What was the cash flow from operating activities?

B) If accruals increased by $15,000, receivables and inventories increased by $50,000, and depreciation and amortization totaled $25,000, what was the firm's net income?

+3
Answers (1)
  1. 12 August, 15:45
    0
    A) What was the cash flow from operating activities?

    +62,000

    B) If accruals increased by $15,000, receivables and inventories increased by $50,000, and depreciation and amortization totaled $25,000, what was the firm's net income?

    $102,000

    Explanation:

    A)

    Ending Cash Balance = Opening cash balance + (net Cash Flow during the year)

    Ending Cash Balance = Opening cash balance + (Cash flow from operating activities + Cash flow from Investing activities + Cash flow from Financing activities)

    $11,000 = $39000 + (Cash flow from operating activities - 210,000 + 120,000)

    $11,000 = $39000 + Cash flow from operating activities - 90,000

    $11,000+$90,000-$39,000 = Cash flow from operating activities

    Cash flow from operating activities = + 62,000

    B)

    Cash Flow from Operating activities = Net Income + Non cash Items - Increase in Working Capital

    62,000 = Net Income + 25,000 - (50,000 + 15000)

    62,000 = Net Income + 25,000 - 65,000

    62,000 = Net Income - 40,000

    Net Income = 62,000 + 40,000 = $102,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Hampton Industries had $39,000 in cash at year-end 2015 and $11,000 in cash at year-end 2016. The firm invested in property, plant, and ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers