Assume that during the year, the Foley Company had net income of $200,000. Its accounts receivable increased by $6,000, and its accrued expenses payable increased by $7,000. Based on this information, net operating cash flows for the year equal
A) 187000
B) 199000
C) 201000
D) 213000

Question

Quizplus · Accepted Answer

To calculate net operating cash flows, we start with net income and adjust for changes in working capital. 
Net income = $200,000 
Increase in accounts receivable = -$6,000 (since this represents cash that is owed to the company but not yet received) 
Increase in accrued expenses payable = $7,000 (since this represents cash that the company owes but has not yet paid out) 
Net operating cash flows = net income + increase in accounts receivable - increase in accrued expenses payable 
= $200,000 - $6,000 + $7,000 
= $201,000

Assume That During the Year, the Foley Company Had Net