Slater Co.reported sales of $350,000 and total expenses of $280,000; wages payable increased by $12,000; inventory decreased by $25,000; accounts payable decreased by $50,000; and amortization was $30,000.What was the net cash flow from operating activities?
A)$87,000
B)$40,000
C)$15,000
D)$63,000

Question

Quizplus · Accepted Answer

Net cash flow from operating activities is calculated by adjusting the net income for changes in working capital and non-cash expenses. Net income is sales minus total expenses, which is $350,000 - $280,000 = $70,000. Adjustments: - Wages payable increased by $12,000, adding to cash flow. - Inventory decreased by $25,000, adding to cash flow. - Accounts payable decreased by $50,000, reducing cash flow. - Amortization of $30,000 is a non-cash expense, adding to cash flow. The total adjustments are $12,000 + $25,000 - $50,000 + $30,000 = $17,000. Therefore, the net cash flow from operating activities is $70,000 + $17,000 = $87,000.

Slater CoReported Sales of $350,000 and Total Expenses of $280,000; Wages