Question

Find the Net Cash Flow of Operating activities?Engineering Wonders reports net income of $53 million. Included in that number is building depreciation expense of $4.1 million and a gain on the sale of land of $1.9 million. Records reveal decreases in accounts receivable, accounts payable, and inventory of $2.5 million, $2.7 million, and $3.3 million, respectively.

Answer 1

Total cash flow from operations $58.3 million

Step-by-step explanation:

We can calculate the net cash flow effect from operating activities by making the following adjustments.

Net Income 53 m

Add: depreciation 4.1 m

Less: Gain on asset disposal (1.9 )m

Add: Reduction in receivables 2.5 m

Less: Reduction in payable (2.7)m

Add: Reduction in inventory 3.3 m

Total cash flow from operations $58.3 million

Gain on asset is part of the investing activities cash flow.

Hope that helps.