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27 March, 19:37

A company has Net Income of $10, which included $2 of depreciation expense. There were no other noncash expenses in Net Income and there were no gains or losses. Accounts receivable was $20 at the beginning of the year and $25 at the end of the year. Accounts Payable was $15 at the beginning of the year and $5 at the end of the year. Inventory was $12 at the beginning of the year and $7 at the end of the year. All other balance sheet accounts were unchanged over the year. What was the company's Cash Flow from Operating Activities?

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  1. 27 March, 19:43
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    Explanation:

    The company's cash flow from operating activities can be calculated as follows:

    $

    Net Income 10

    Add:depreciation expense 2

    Less:changes in accounts receivable (5)

    (20-25)

    Less:changes in accounts payable (10)

    (5-15)

    Add:changes in inventory 5

    (12-7)

    Cash flow from operating activities 2
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