The following are facts about the activities of Ziegler Company. Net Income was $79,660. Amortization of Premium on Bonds Payable, $9,950. Bonds Payable increased by $45,000 during the year. Prepaid Insurance decreased by $5,050. Accounts Payable decreased by $14,440. Cash Dividends Payable was $7,450 at the beginning of the year and $3,000 at the end of the year. No additional dividends were declared during the year. Fully depreciated equipment that had cost $27,800 was sold for $520.
Based on these facts, what is the Cash Flows from Operating Activities amount?
What Is Operating Cash Flow:
A company's Operating Cash Flow is an important metric for external users and is presented on the statement of cash flows. The Operating Cash Flow is the cash generated by the company's income as well as by changes to its working capital.
Answer and Explanation:
See the details formula and calculation below.
Cash Flows from Operating Activities = Net income + decrease in Prepaid Insurance - decrease in accounts payable - gain on fully amortized equipment
=79,660 + 5,050 - 14,440 - 520
The answer is thus $69,750.
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Learn more about this topic:
from Finance 101: Principles of FinanceChapter 10 / Lesson 4