In 2018, Usher Sports Shop had cash flows from investing activities of −$4,384,000 and cash flows from financing activities of −$5,890,000. The balance in the firm’s cash account was $1,617,000 at the beginning of 2018 and $1,746,000 at the end of the year. Calculate Usher Sports Shop’s cash flow from operations for 2018. (Amounts to be deducted should be indicated by a minus sign.)

Question
Asked Oct 6, 2019

In 2018, Usher Sports Shop had cash flows from investing activities of −$4,384,000 and cash flows from financing activities of −$5,890,000. The balance in the firm’s cash account was $1,617,000 at the beginning of 2018 and $1,746,000 at the end of the year.

 

Calculate Usher Sports Shop’s cash flow from operations for 2018. (Amounts to be deducted should be indicated by a minus sign.)

 

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Expert Answer

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Step 1

Cash flow statement helps in the determining net change in cash of a company for that particular financial year. Therefore, net change in cash can be calculated as below

Net Change in cash = Ending cash balance - Beginning cash balance
=1746000-1617000
129000
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Net Change in cash = Ending cash balance - Beginning cash balance =1746000-1617000 129000

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Step 2

Also, the change in cash flow can be calculated...

Net Change in Cash flow Operating cash flow Investing Cash flow Financing Cash flow
equating both of them'
129000 Operating cash flow -4384000 -5890000
we get
Operating cash flow 10403000
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Net Change in Cash flow Operating cash flow Investing Cash flow Financing Cash flow equating both of them' 129000 Operating cash flow -4384000 -5890000 we get Operating cash flow 10403000

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