Question

A house painting business had revenues of $17,000 and expenses of $10,000 last summer. There were no depreciation expenses. However, the business reported the following changes in working capital:

Beginning End
Accounts receivable $2,200 $5,500
Accounts payable 900 400

Calculate net cash flow for the business for this period.

Net cash flow $ _________

Answer 1

Answer:

$3,200

Explanation:

Given that,

Revenues = $17,000

Expenses = $10,000

Net Cash flow for the period:

= Net profit for the period -  Increase in accounts receivable - Decrease in accounts payable

= ($17,000 - $10,000) - $3,300 - $500

= $7,000 - $3,300 - $500

= $3,200

Therefore, the net cash flow for the business for this period is $3,200.