Assume that during the year, the Grey Company had net income of $300,000. Its inventory increased by $6,000 and its accounts payable decreased by $7,000. Based on this information, net operating cash flows for the year equal
A) 287000
B) 299000
C) 301000
D) 313000

Question

Quizplus · Accepted Answer

Net operating cash flows are calculated by adjusting net income for changes in working capital. An increase in inventory decreases cash flow by $6,000, and a decrease in accounts payable decreases cash flow by $7,000. Therefore, the net operating cash flow is $300,000 - $6,000 - $7,000 = $287,000.

Assume That During the Year, the Grey Company Had Net