ABC Company reported total sales revenue of $80,000 and total expenses of $72,000 for the year ended December 31,20X.During 20X,trade receivables increased by $3,000,merchandise inventory decreased by $2,000,trade payables increased by $1,000,and $5,000 in depreciation expense was recorded.Assuming no other adjustments to profit are needed,what was the net cash inflow from operating activities?
A)$10,000.
B)$11,000.
C)$13,000.
D)$19,000.

Question

Quizplus · Accepted Answer

The net cash inflow from operating activities is calculated by adjusting net income for changes in working capital and non-cash expenses. Net income is $8,000 ($80,000 - $72,000). Adjust for non-cash depreciation expense (+$5,000), increase in trade receivables (-$3,000), decrease in inventory (+$2,000), and increase in trade payables (+$1,000). The net cash inflow is $13,000 ($8,000 + $5,000 - $3,000 + $2,000 + $1,000).

ABC Company Reported Total Sales Revenue of $80,000 and Total