In its statement of cash flows issued for the year ending september 30, berne company reported a net cash inflow from operating activities of $123,000. the following adjustments were included in the supplementary schedule reconciling cash flow from operating activities with net income:
depreciation $38,000
increase in net accounts receivable 31,000
decrease in inventory 27,000
increase in accounts payable 48,000
increase in interest payable 12,000
net income is
a. $41,000
b. $29,000
c. $79,000
d. $217,000

B. $29,000

Explanation:

The cashflow from operating activities is calculated as below:

Cashflow from operating activities = Net income + Depreciation - Working capital investment

                                                          = Net income + Depreciation - (Change in inventories + Change in account receivables - Change in account payables)

Putting all the number together, we have:

123,000 = Net income + 38,000 - [(-27,000) + 31,000 - 48,000 - 12,000),

Solve the equation we get Net income = 29,000.

an online clothing brand

explanation:

disadvantages of leasing a vehicle: no vehicle equity and mileage limitations

disadvantages of purchasing a vehicle: large down payment and vehicle depreciation

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