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Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977
Textbook Problem

STATEMENT OF CASH FLOWS W.C. Cycling had $55,000 in cash at year-end 2014 and $25,000 in cash at year-end 2015. The firm invested in property, plant, and equipment totaling $250,000. Cash flow from financing activities totaled $170,000.

  1. a. What was the cash flow from operating activities?
  2. b. If accruals increased by $25,000, receivables and inventories increased by $100,000, and depreciation and amortization totaled $10,000, what was the firm’s net income?

a.

Summary Introduction

To compute: The cash flow from operating activities

Statement of Cash Flow: It is a part of financial statements that are included in the annual report of a company. It reports the cash generate or used by the business in a specified period.

Cash Flow from Operating Activities: The cash generated over and above required by business operations is called and reported as cash flow from operating activities. Statement of cash flow reports the net cash flow generated or consumed by the business.

Explanation

Statement of cash flow for Company W:

 Amount ($)
Net cash provided by operating activities ($250,000$170,000$30,000)50,000
Net cash used in investing activi

b.

Summary Introduction

To compute: The net income of Company W.

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