Calculate net cash flow from operating activities if:
Statement of financial performance (extract)
$\begin{array}{ll}
\text { Sales (credit) } & \$ 70,000 \
\text { Less Expenses (cash) } & \$ 48,000 \
\text { Profit } & \$ 22,000
\end{array}$
$\text { Ledger acount (extrat) }$
$\begin{array}{ll}
&\text { Start of } & \text { End of } \
&\text { Period } & \text { Period }\\text { Accournts }\
\text { Receivable }&\$6,000&\$9,000
\end{array}$

Question

Quizplus · Accepted Answer

Net cash flow from operating activities is calculated as Profit + Decrease in Accounts Receivable (or - Increase in Accounts Receivable) - Expenses (if not already accounted for in profit). Here, Profit = $22,000, Increase in Accounts Receivable = $9,000 - $6,000 = $3,000. Therefore, Net Cash Flow = $22,000 - $3,000 = $19,000. Expenses are not added back because they are cash expenses and already deducted to arrive at the profit.

Calculate Net Cash Flow from Operating Activities If: Statement of Financial

Calculate Net Cash Flow from Operating Activities If:
Statement of Financial