The 20B income statement of Dunn Company reported total sales revenue of $106,000 and total expenses of $108,000 .Expenses were: building depreciation,$10,000 and patent amortization,$5,000.There was an increase in inventory of $1,000.What was cash flow from operating activities during 20B (parentheses indicate outflow)?
A)($3,000).
B)$7,000.
C)$12,000.
D)$14,000.

Question

Quizplus · Accepted Answer

The net loss is $2,000 ($106,000 - $108,000). Add back non-cash expenses: building depreciation ($10,000) and patent amortization ($5,000). The increase in inventory ($1,000) is a cash outflow. Cash flow from operating activities is $12,000 ($2,000 loss + $10,000 + $5,000 - $1,000).

The 20B Income Statement of Dunn Company Reported Total Sales