A company had cash revenues of $200,000, cash expenses of $150,000, amortization expense of $15,000, and a gain on the sale of a piece of land of $4,000.What was the difference between their net income and their cash from operations for the year?

Question

Quizplus · Accepted Answer

To calculate the cash from operations, we need to add back the amortization expense of $15,000 and subtract the gain on sale of $4,000. This gives us cash from operations of $61,000 ($150,000 + $15,000 - $4,000 = $161,000). The difference between this and the net income of $50,000 ($200,000 - $150,000 - $15,000 + $4,000 = $39,000) is $11,000 lower net income.

A Company Had Cash Revenues of $200,000, Cash Expenses of $150,000