Question

Chris’s Outdoor Furniture, Inc., has net cash flows from operating activities for the last year of $460 million. The income statement shows that net income is $435 million and depreciation expense is $56 million. During the year, the change in inventory on the balance sheet was $46 million, change in accrued wages and taxes was $26 million, and change in accounts payable was $37 million. At the beginning of the year, the balance of accounts receivable was $56 million. Calculate the end-of-year balance for accounts receivable. (Enter your answer in millions of dollars.)

Answer 1

Statement of cash flow from operating Activities helps to find the balance of account receivable

Cash flow from operating activities

			(in Millions)
Net income			$          435.00
Add: Depreciation			$             56.00
increase accrued wages and Taxes			$             26.00
increase in accounts payable			$             37.00
Less: increase accounts receivable ( Cash flow from operating activities last year minus net income minus depreciation minus change in accrued wages and taxes minus change in account payable add change in inventory) (460- 435 -56-26- 37 + 46)			$          (48.00)
increase in inventory			$          (46.00)
Net cash flow from operating activities			$          460.00

End of balance of account receivable = beginning balance of account receivable + increase in account receivable

End of balance of account receivable = 56+48 =104 millions