Ramakrishnan, Inc., reported 2015 net income of $10 million and depreciation of
ID: 2786126 • Letter: R
Question
Ramakrishnan, Inc., reported 2015 net income of $10 million and depreciation of $2,600,000. The top part of Ramakrishnan, Inc.'s 2015 and 2014 balance sheets is reproduced below (in millions of dollars). 2015 2014 2015 2014 Current assets: Current liabilities Cash and marketable securities Accounts receivable $15 $10 Accrued wages and taxes 21 S19 61 35 30 85 76 Accounts payable nventory 122 112 Notes payable Total $222 $198 Total 117 $104 Calculate the 2015 net cash flow from operating activities for Ramakrishnan, Inc. (Enter your answer in dollars not in millions.) Net cash flowExplanation / Answer
The following is the calculation of cash flow from operating activities:
note: an increase in current asset should be reduced from net income, a decrease in current asset should be added to net income.
an increase in current liability should be added to net income, a decrease in current liability should be reduced from net income, to arrive at the cash flow from operating activities.
Net income $10 million Add: depreciation 2.6 million Less: increase in accounts receivable (85 - 76) (9 million) less: increase in inventory (122 -112) (10 million) Add: Increase in current liabilities ($117 -104) $13 million cash flow from operating activities $6.6 millionRelated Questions
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