Calculate cash inflow or outflow from operating activities given the following information: Net loss -$12,000; depreciation expense $3,000; increase in AR $1,250; decrease in inventory $900; increase in AP $760.

Question

Quizplus · Accepted Answer

To calculate cash inflow/outflow from operating activities, we start with net loss and adjust for non-cash expenses and changes in working capital.

Net loss: -$12,000 
Add back depreciation: +$3,000 
Adjust for changes in working capital: 
Increase in AR: -$1,250 
Decrease in inventory: +$900 
Increase in AP: +$760

Inflow/outflow from operating activities = -$12,000 + $3,000 - $1,250 + $900 + $760 = -$8,590

Therefore, the correct answer is C, cash outflow of $8,590.

Calculate Cash Inflow or Outflow from Operating Activities Given the Following