Question

The following information are offered to you for X Company Account Name 2019 2018 Cash $ 70,500 $50,300 Accounts Receivable 40,500 48,500 Marketable Securities 6,000 10,000 Inventory 65,000 50,000 Accounts payable $ 65,000 $ 55,000 Salaries Payable 3,900 7,900 Other information: · Net income at the end of 2019 is $50,000. · Depreciation expense of 2019 is $15,000. · A Truck with a cost of $18,000 and a net book value of $7,000 was sold during 2019 at $5,000. Using indirect method, the net cash flow from operating activities will be:

Answer 1

Answer)

Cash Flow Statement (Indirect Method)
Cash Flow from Operating Activities	Amount (In $)	Amount (In $)
Net Income	50,000
Add: Loss on sale of truck ($ 7,000 - $ 5,000)	2,000
Add: Depreciation Expense	15,000
Changes in Current Assets and Current Liabilities:
Decrease in accounts receivable ($ 48,500 - $ 40,500)	8,000
Increase in inventory ($ 50,000 - $ 65,000)	(15,000)
Increase in Accounts payable ($ 65,000 - $ 55,000)	10,000
Decrease in Salaries Payable ($ 3,900 - $ 7,900)	(4,000)
Net cash generated from (used in) operating activities		66,000