The Hamada Company sales for 2013 totaled $150,000 and purchases totaled $95,000. Selected January 1, 2013, balances were: accounts receivable, $18,000; inventory, $14,000; and accounts payable, $12,000. December 31, 2013, balances were: accounts receivable, $16,000; inventory, $15,000; and accounts payable, $13,000. Net cash flows from these activities were:

Question

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Net cash flows from operating activities can be calculated as: Sales - Increase in Accounts Receivable + Decrease in Inventory - Purchases + Increase in Accounts Payable. This equals $150,000 - ($18,000 - $16,000) + ($14,000 - $15,000) - $95,000 + ($13,000 - $12,000) = $58,000.

The Hamada Company Sales for 2013 Totaled $150,000 and Purchases