Rodriguez Company reported sales revenue of $100,000 and total expenses of $90,000 (including depreciation) for the year ended December 31. During the year, accounts receivable decreased by $4,000, merchandise inventory increased by $3,000, accounts payable increased by $2,000, and depreciation expense of $7,000 was recorded.
Assuming no other data are needed, the net cash inflow from operating activities for the year was:

Question

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The net cash inflow from operating activities is calculated by adjusting the net income for changes in working capital and non-cash expenses. Net income is $10,000 ($100,000 sales revenue - $90,000 total expenses). Adjustments: add back depreciation expense ($7,000), decrease in accounts receivable adds $4,000, increase in inventory subtracts $3,000, and increase in accounts payable adds $2,000. The total adjustments are $10,000 ($7,000 + $4,000 - $3,000 + $2,000), making the net cash inflow $20,000 ($10,000 net income + $10,000 adjustments).

Rodriguez Company Reported Sales Revenue of $100,000 and Total Expenses