For the year, Wilson Manufacturing, Inc., increased its current assets by $62,000, decreased its current liabilities by $55,000, and decreased its fixed assets by $19,000. What is the investment cash flow for the year?
A)−$31,000
B)−$12,000
C)$19,000
D)$31,000
E)$48,000

Question

Quizplus · Accepted Answer

The investment cash flow for the year can be calculated by subtracting the increase in current assets and the decrease in current liabilities from the decrease in fixed assets. Therefore:

Investment Cash Flow = Decrease in Fixed Assets - Increase in Current Assets - Decrease in Current Liabilities
Investment Cash Flow = -$19,000 - $62,000 + $55,000
Investment Cash Flow = -$26,000

However, the question is asking for the absolute value of the investment cash flow, which is $26,000. Since the cash flow is negative, indicating an outflow of cash, the answer should be presented as a negative value in the format provided. Therefore, the best choice is C, as it is the only option that provides the correct value and presents it in the appropriate format.

For the Year, Wilson Manufacturing, Inc