Question

Keyser Beverage Company reported the following items in the most recent year. Net Income: $45,000 Dividends Paid: $5,000 Increase in Accounts Receivable: $10,000 Increase in Accounts Payable: $7,000 Purchase of Equipment: $8,000 Depreciation Expense: $45,000 Issue of Notes Payable: $20,000 Compute net cash from operating activities?

Answer 1

To calculate the net cash from operating activities, start with net income and make adjustments for non-cash expenses and changes in working capital.

Step-by-step explanation:

To calculate the net cash from operating activities, we need to start with the net income and make adjustments for non-cash expenses and changes in working capital. Here's how:

1. Start with the net income: $45,000.
2. Add back non-cash expenses like depreciation: $45,000.
3. Subtract any increase in accounts receivable: $10,000.
4. Add any increase in accounts payable: $7,000.

So, the net cash from operating activities for Keyser Beverage Company is $87,000.