Question

In its statement of cash flows issued for the year ending December 31, Oxford Company reported a net cash inflow from operating activities of $123,000. The following adjustments were included in the supplementary schedule reconciling cash flow from operating activities with net income:

Depreciation	$38,000
Increase in net accounts receivable	31,000
Decrease in inventory	27,000
Decrease in accounts payable	48,000
Increase in interest payable	12,000

Net income is:

Select one:

a. $29,000

b. $41,000

c. $79,000

d. $217,000

e. $125,000

Answer 1

cash inflow from operating activities	$         1,23,000
Add:
Increase in net accounts receivable	$             31,000
Decrease in accounts payable	$             48,000
Less:
Depreciation	$             38,000
Decrease in inventory	$             27,000
Increase in interest payable	$             12,000
Net Income	$         1,25,000
Correct Option : e. $125,000