Question

Suppose Torche Corporation has the following results related to cash flows for 2018:

Net Income of $8,500,000

Decrease in Accounts Payable of $400,000

Increase in Accounts Receivable of $800,000

Increase in Debt of $100,000

Depreciation Expenses of $1,600,000

Purchases of Property, Plant, & Equipment of $5,400,000

Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with amounts in thousands.

What is the Net Cash Flow?

Please specify your answer in the same units as the statement of cash flows.

Answer 1

Net Cash Flow is $3600000

Calculated as following

Note all amounts are shown in thousands as required by the questions

All amounts in thousands
Suppose Torch Corporation
Calculations of Net Cash Flow
Cash from operating activities:
Consolidated net income	$          8,500
Adjustment from accrual to cash	$                 -
Depreciation and Amortization	$          1,600
Decrease in accounts receivable	$           (800)
Decrease in Accounts payable	$           (400)
Net cash flow from operating activities	$          8,900	$            8,900
		$                   -
Cash flow from investing activities		$                   -
Purchase of equipment		$         (5,400)
		$                   -
		$                   -
Net cash flow from financing activities		$                   -
Increase in Debt		$               100
		$                   -
Net Cash flow from all activities		$            3,600

If amounts are not shown in thousands it ll be shown as below

Suppose Torch Corporation
Calculations of Net Cash Flow
Cash from operating activities:
Consolidated net income	$ 8,500,000
Adjustment from accrual to cash
Depreciation and Amortization	$ 1,600,000
Decrease in accounts receivable	$   (800,000)
Decrease in Accounts payable	$   (400,000)
Net cash flow from operating activities	$ 8,900,000	$   8,900,000
Cash flow from investing activities
Purchase of equipment		$ (5,400,000)
Net cash flow from financing activities
Increase in Debt		$       100,000
Net Cash flow from all activities		$   3,600,000

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