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Rachel's Recordings reported net income of $250,000. Beginning balances in Accounts Receivable and Accounts Payable were $19,000 and $21,000 respectively. Ending balances in these accounts were $10,500 and $28,000, respectively. Assuming that all relevant information has been presented, Rachel's net cash flows from operating activities would be:

Sagot :

The cash flow from operating activities is $2,65,500

Given :

Net income  = $250,000

Increase in Accounts Payable = ( Ending balance - Beginning Balance) = $28000 - $21,000 = $7000

Decrease in Accounts Receivable = ( Ending balance - Beginning Balance) =   $10,500 - $19,000 = $8500

Cash flow from operating activities = Net income + Increase in Accounts Payable + Decrease in Accounts Receivable = $2,65,500.

What Is Cash Flow?

The term cash flow refers to the net amount of cash and cash equivalents being transferred in and out of a company. Cash received represents inflows, while money spent represents outflows. A company’s ability to create value for shareholders is fundamentally determined by its ability to generate positive cash flows or, more specifically, to maximize long-term free cash flow (FCF).

FCF is the cash generated by a company from its normal business operations after subtracting any money spent on capital expenditures.

Learn more about Cash Flow on:

brainly.com/question/24179665

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