Question

Hampton Industries had $68,000 in cash at year-end 2017 and $15,000 in cash at year-end 2018. The firm invested in property, plant, and equipment totaling $220,000. Cash flow from financing activities totaled +$240,000. Round your answers to the nearest dollar, if necessary.

What was the cash flow from operating activities? Cash outflow, if any, should be indicated by a minus sign. $

If accruals increased by $35,000, receivables and inventories increased by $185,000, and depreciation and amortization totaled $5,000, what was the firm's net income? $

Answer 1

1. Ending Cash=Begining Cash+Cashflow from Operating activities+Cashflow from Investing activities+Cashflow from financing activities

15000=68000+Cashflow from Operating activities-220,000+240,000

Cashflow from Operating activities=15,000-68,000-20,000=-$73,000

2. Cashflow from Operating activities=Net income+depreciation-increase in inventories and accounts receivables+increase in accruals

-73,000=Net Income+5000-185000+35,000

Net income=-73,000-5000+185,000-35,000=72,000

Net income=$72,000