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In its statement of cash flows issued for the year ending December 31, Oxford Company reported...

In its statement of cash flows issued for the year ending December 31, Oxford Company reported a net cash inflow from operating activities of $123. The following adjustments were included in the supplementary schedule reconciling cash flow from operating activities with net income:

Patent Amortization

$38

Increase in net accounts receivable

31

Decrease in inventory

27

Decrease in accounts payable

48

Gain on fixed asset sale

12

Net income is:

Select one:

a. $26

b. $149

c. $125

d. $97

e. $225

Solutions

Expert Solution

Calculation of Net Income by doing reverse calculation
Cash inflow from operating activities                        123
Less: Patent Amortization                         (38)
Add: Increase in net accounts receivable                           31
Less: Decrease in inventory                         (27)
Add: Decrease in accounts payable                           48
Add: Gain on fixed asset sale                           12
Net Income                        149
Hence, the Net Income is (b). $149

ekkarill92 answered 2 years ago
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