Chaffee Company's financial statements show a net loss of $180,000. The following items also appear on Chaffee's balance sheet: What is Chaffee's net cash flow from operating activities?

Question

Chaffee Company's financial statements show a net loss of $180,000. The following items also appear on Chaffee's balance sheet:  What is Chaffee's net cash flow from operating activities?

Quizplus · Accepted Answer

Net loss is added back to get to net cash flow from operating activities, so the calculation would be:
- Depreciation expense: $97,000
- Loss on sale of assets: $22,000
+ Increase in accounts receivable: ($40,000)
- Increase in inventory: $66,000
+ Increase in accounts payable: $9,000
+ Increase in accrued liabilities: $32,000
Net cash flow from operating activities = ($180,000 + $97,000 + $22,000 - $40,000 + $66,000 + $9,000 + $32,000) = ($156,000)

Chaffee Company's Financial Statements Show a Net Loss of $180,000