Question

Rachel's Recordings reported net income of $240,000. Beginning balances in Accounts Receivable and Accounts Payable were $17,000 and $22,000 respectively. Ending balances in these accounts were $11,500 and $30,000, respectively. Assuming that all relevant information has been presented, Rachel's net cash flows from operating activities would be:

Answer 1

Answer:

Rachel's net cash flows from operating activities is $258,500

Explanation:

            Rachel Cash flow from Operating activities

Particulars                                                                Amount

Net Income                                                              $240,000

+ Increase in Account Payable                              +$13,000            

(Ending balance - Beginning balance)

30,000-17,000= 13,000

-Decrease in Account receivable                          +$5500

(Ending balance - Beginning balance)

11,500-17,000= -5500

Cash flow from operating activities                    $258,500

Therefore, the cash flow from operating activities is $258,500