Question

The following information has been provided to you by Watts Corporation:

Net Income: 169,000

Increase in accounts payable: 18,500

Increase in inventory: 17,500

Increase in accounts recievable: 9,700

Increase in bonds payable: 75,000

Depriciation expense: 21,300

Depreciation in income taxes payable: 7,300

What is Watts Corporation's net cash flow from operating activities?

Answer 1

• Watts Corporation's net cash flow from operating activities = $ 174,300
• Note: Increase in Bonds payable is a Financing activities.

No.	Conceptual Notes
1	Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time.
2	Effects of Non - Cash Transaction are adjusted from Net Income.
3	Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement.
4	Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income
5	Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income

Net Income	$169,000
Adjustments to Net Income
Depreciation expense	$21,300
Increase in accounts payable	$18,500
Increase in inventory	($17,500)
Increase in accounts receivable	($9,700)
Depreciation in income taxes payable	($7,300)
Net Cash flows from Operating activities	$174,300