Question

In: Finance

Construct the Operating Activities part ONLY for 2017 from the Statement of Cash Flows based on...

Construct the Operating Activities part ONLY for 2017 from the Statement of Cash Flows based on the information below:

Thomas Company
2017 Income Statement
($ in millions)
Net sales $ 9,530
Cost of goods sold 7,760
Depreciation 465
Earnings before interest and taxes $ 1,305
Interest paid 104
Taxable income $ 1,201
Taxes 420
Net income $ 781
Thomas Company
2016 and 2017 Balance Sheets
($ in millions)
2016 2017 2016 2017
Cash $ 230 $ 260 Accounts payable $ 1,370 $ 1,385
Accounts rec. 1,000 900 Long-term debt 1,100 1,300
Inventory 1,810 1,695 Common stock 3,340 3,250
Total $ 3,040 $ 2,855 Retained earnings 640 890
Net fixed assets 3,410 3,970
Total assets $ 6,450 $ 6,825 Total liab. & equity $ 6,450 $ 6,825

Solutions

Expert Solution

Below si the statement showing Operating Cash Flow :

Amount
Net Income 781
Add: Non Cash /Non Operating Item
Depreciation (Being Non cash Item) 465
Interest Paid (Non Operating Item) 104
(+/-) Changes in Working Capital
Add Decrease in Accounts Receivable (1000 - 900) 100
Add : Decrease in Inventory (1810 - 1695) 115
Add : Increase in Accounts Payable(1385 - 1370) 15
Net Cash flow from Operating Activity 1580

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