Alpha's Company's Fiscal Year 2017 Statement of Cash Flows reflected information that cash provided by operating activities was $800,000. The following additional information was provided:
Depreciation Expense $380,000
Common Stock Dividends $200,000
Accounts Receivable decrease $110,000
Accounts Payable increase $60,000
Use this information and determine Alpha Company's the Net Income (Net Loss) the 2017 Fiscal Year.
What Is Operating Cash Flow:
A company's Operating Cash Flow is presented at the top of the cash flow statement as per GAAP. The Operating Cash Flow is the cash that is used/generated by the company's core operations (i.e. income) as well as by changes to its working capital.
Answer and Explanation:
See the formula and calculation below.
Net income = Cash provided by operating activities - depreciation expense - Accounts Receivable decrease - Accounts Payable increase
=800,000 - 380,000 - 110,000 - 60,000
The answer is thus $250,000.
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Learn more about this topic:
from Finance 101: Principles of FinanceChapter 10 / Lesson 4