The activities for the year ended December 31, 2021 included the following: • 2021's net income after taxes totaled $125,000.
• Accounts receivable increased $32,000
• Recorded a $10,000 goodwill impairment loss during the year
• Inventory decreased $8,000
How much would be presented as cash flow from operations?
A)$85,000
B)$111,000
C)$127,000
D)$135,000

Question

Quizplus · Accepted Answer

To calculate cash flow from operations, start with net income ($125,000), subtract the increase in accounts receivable ($32,000), add back the goodwill impairment loss ($10,000), and add the decrease in inventory ($8,000). This results in $125,000 - $32,000 + $10,000 + $8,000 = $111,000.

The Activities for the Year Ended December 31, 2021 Included