An analyst has gathered the following information about a company Income Statement for the Year 2004...

An analyst has gathered the following information about a company

Income Statement for the Year 2004
Sales                                                      $1,500
Expenses
COGS                        $1,300
Depreciation                     30
lnt Expenses                     40
Total expenses                                           1,370
Income from cont op                                     130
Gain on sale                                                   30
Income before tax                                         160
Income tax                                                     64
Net Income                                                   $96

Additional Information:

Dividends paid                                                                                                 $30
Common stock sold                                                                                            20
Equipment purchased                                                                                         50
Bonds issued                                                                                                      80
Fixed asset sold for (original cost of $100 with accumulated depreciation of $70)     60
Accounts receivable decreased by                                                                        30
Inventory decreased by                                                                                       20
Accounts payable increased by                                                                             20
Wages payable decreased by                                                                               10

What is the cash flow from operations?

1. $170

2. $156

3. $135

Expert Solution

Cash frow from operations include cash flow from operating activities of the business

Cash flow from operations = Net Income + Depreciation – Gain on Sale + Decrease in accounts receivables + Decrease in Inventory + Increase in accounts payable – Decrease in wages payable

= 96+30-30+30+20+20-10

= $156

i.e. 2)

jeff jeffy answered 2 years ago

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