Question

3.) eBook Hampton Industries had $68,000 in cash at year-end 2018 and $16,000 in cash at year-end 2019. The firm invested in property, plant, and equipment totaling $240,000 — the majority having a useful life greater than 20 years and falling under the alternative depreciation system. Cash flow from financing activities totaled +$140,000. Round your answers to the nearest dollar, if necessary. What was the cash flow from operating activities? Cash outflow, if any, should be indicated by a minus sign. $   If accruals increased by $50,000, receivables and inventories increased by $95,000, and depreciation and amortization totaled $19,000, what was the firm's net income? $

Answer 1

a. Cash Flow from operating activities = $48,000

A	Opening cash	68,000	2018 Closing Cash
B	Cash Flow	-52,000	C - A
B1	Operating Activities	48,000	B - (B1 + B2)
B2	Financing Activities	140,000	Given
B3	Investing Activities	-240,000	Given
C	Closing cash	16,000	2019 Closing Cash

b. Firm's Net Income is $74,000

Operating Cash Flow	48,000	A
Additional Accruals	-50,000	B
Inventories Increase	95,000	C
Depreciation	-19,000	D
Net Income	74,000	A + B + C + D