Question

Bird Brain Co. reported net income of $45,100 for the year ended December 31, 2018. January 1 balances in accounts receivable and accounts payable were $23,900 and $24,100 respectively. Year-end balances in these accounts were $20,500 and $28,000, respectively. Assuming that all relevant information has been presented, Bird Brain's cash flows from operating activities would be:

Answer 1

Answer:

$52,400

Explanation:

Given that,

Net income = $45,100

Opening accounts receivable = $23,900

Opening accounts Payable = $24,100

Ending accounts receivable = $20,500

Ending accounts Payable = $28,000

Net accounts receivables:

= Opening accounts receivable - Ending accounts receivable

= $23,900 - $20,500

= $3,400

Net accounts payable:

= Ending accounts payable - Opening accounts payable

= $28,000 - $24,100

= $3,900

Bird Brain's cash flows from operating activities:

= Net income + Net accounts receivables + Net accounts payable

= $45,100 + $3,400 + $3,900

= $52,400