Question

In: Accounting

The following information has been provided to you by Watts Corporation: Net Income: 169,000 Increase in...

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?

Solutions

Expert Solution

  • 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

ekkarill92 answered 2 years ago
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