Question

Suppose Ruston Company has the following results related to cash flows for 2019:

Net Income of $5,800,000
Increase in Accounts Payable of $300,000
Increase in Accounts Receivable of $600,000
Increase in Debt of $700,000
Depreciation Expenses of $1,300,000
Dividends Paid of $500,000
Decrease in Inventory of $1,000,000
Purchases of Property, Plant, & Equipment of $8,300,000
Other Adjustments from Financing Activities of $200,000
Other Adjustments from Investing Activities of $500,000
Other Adjustments from Operating Activities of $800,000

Create a statement of cash flows with amounts in thousands.

What is the Net Cash Flow?

Note: Financial results are provided in dollars but the income statement units are thousands of dollars.

Please specify your answer in the same units as the statement of cash flows (i.e., enter the number from your completed statement of cash flows).

Answer 1

Solution:

Ruston Company
Statement of Cash Flows
For year ended 2019
Particulars	Details	Amount (In '000)
Cash Flow from Operating Activities:
Net Income	$5,800.00
Adjustments to reconcile net income to net cash provided by operations:
Depreciation Expense	$1,300.00
Increase in accounts receivables	-$600.00
Decrease in accounts payable	$300.00
Decrease in inventory	$1,000.00
Other adjustment	$800.00
Net Cash provided by operating activities		$8,600.00
Cash Flow from Investing Activities:
Purchase of Property, Plant and equipment	-$8,300.00
Other adjustments	$500.00
Net Cash Provided by Investing activities		-$7,800.00
Cash Flow from Financing Activities:
Dividend Paid	-$500.00
Proeed from issue of debt	$700.00
Other adjustments	$200.00
Net Cash used in financing activities		$400.00
Net Cash Flow		$1,200.00