A house painting business had revenues of $16,900 and expenses of $9,900 last summer. There were no depreciation expenses. However, the business reported the following changes in working capital: Beginning of Year End of Year Accounts receivable $ 2,100 $ 5,400 Accounts payable 880 390 Calculate net cash flow for the business for this period.

Question

Business

Lailah Griffith

22 April, 23:20

A house painting business had revenues of $16,900 and expenses of $9,900 last summer. There were no depreciation expenses. However, the business reported the following changes in working capital: Beginning of Year End of Year Accounts receivable $ 2,100 $ 5,400 Accounts payable 880 390 Calculate net cash flow for the business for this period.

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Selina Finley · Answer 1

The net cash flow for the business for this period is $3,210

Explanation:

The net cash flow is shown below:

= Revenues - expenses - increase in accounts receivable - decrease in accounts payable

= $16,900 - $9,900 - $3,300 - $490

= $3,210

The Revenues - expenses = net income

Increase in accounts receivable = Ending balance - opening balance

= $5,400 - $2,100

= $3,300

Decrease in accounts receivable = Opening balance - ending balance

= $880 - $390

= $490