The 20X2 income statement for Ryan Corporation showed the following:

$\begin{array}{|l|r|}
\hline \text { Profit } & \$ 81,000 \
\hline \text { Depreciation expense } & 8,000 \
\hline
\end{array}$

The statement of financial position showed:

$\begin{array}{|l|r|}
\hline \text { Trade receivables increase } & \$ 5,000 \
\hline \text { Prepaid expenses decrease } & 2,000 \
\hline
\end{array}$
-What was the cash flow from operating activities?

Question

The 20X2 income statement for Ryan Corporation showed the following:

$\begin{array}{|l|r|}
\hline \text { Profit } & \$ 81,000 \
\hline \text { Depreciation expense } & 8,000 \
\hline
\end{array}$

The statement of financial position showed:

$\begin{array}{|l|r|}
\hline \text { Trade receivables increase } & \$ 5,000 \
\hline \text { Prepaid expenses decrease } & 2,000 \
\hline
\end{array}$
-What was the cash flow from operating activities?

Quizplus · Accepted Answer

To calculate the cash flow from operating activities, start with the profit of $81,000, add back the non-cash expense of depreciation ($8,000), subtract the increase in trade receivables ($5,000), and add the decrease in prepaid expenses ($2,000). This results in a cash flow from operating activities of $86,000.

The 20X2 Income Statement for Ryan Corporation Showed the Following Profit $81,000 Depreciation expense 8,000\begin{array}{|l|r|}\hline \text { Profit } & \$ 81,000 \\\hline \text { Depreciation expense } & 8,000 \\\hline\end{array} Profit Depreciation expense ​$81,0008,000​​

The 20X2 Income Statement for Ryan Corporation Showed the Following $\begin{array}{|l|r|}\hline \text { Profit } & \$ 81,000 \\\hline \text { Depreciation expense } & 8,000 \\\hline\end{array}$