### Understanding Net Cash Flows from Operating ActivitiesA company reported net income of $250,000. Beginning balances in Accounts Receivable and Accounts Payable were $20,000 and $21,000 respectively. Ending balances in these accounts were $10,500 and $29,000, respectively. Assuming that all relevant information has been presented, what is the company’s net cash flows from operating activities?### Multiple Choice:- $259,500.- $232,500.- $267,500.- $250,000.#### Explanation:To calculate the net cash flows from operating activities, we need to adjust the net income for changes in working capital accounts (Accounts Receivable and Accounts Payable).**Step-by-Step Calculation:**1. **Accounts Receivable:** - Beginning Accounts Receivable: $20,000 - Ending Accounts Receivable: $10,500 - Decrease in Accounts Receivable: $20,000 - $10,500 = $9,500 Since there is a decrease in Accounts Receivable, it implies that the company collected more cash, hence it is added to the net income.2. **Accounts Payable:** - Beginning Accounts Payable: $21,000 - Ending Accounts Payable: $29,000 - Increase in Accounts Payable: $29,000 - $21,000 = $8,000 An increase in Accounts Payable implies the company paid less cash, thus it is also added to the net income.Summarizing the adjustments:- Net income: $250,000- Add decrease in Accounts Receivable: $9,500- Add increase in Accounts Payable: $8,000Net cash flow from operating activities:\[ \$250,000 + \$9,500 + \$8,000 = \$267,500 \]Therefore, the correct answer is:\[ \boxed{\$267,500} \]

The cash flow of a company occurred during an accounting period is divided into three categories; 1)…

A company reported net Income of $250,000. Beginning balances In Accounts Recelvable and Accounts Payable were $20,000 and $21,000 respectively. Ending balances In these accounts were $10,500 and $29,000, respectively. Assuming that all relevant information has been presented, what is the company's net cash flows from operating activities? Multiple Cholce $259.500 $232,500. $267,500. $250.000.

A company reported net Income of $250,000. Beginning balances In Accounts Recelvable and Accounts Payable were $20,000 and $21,000 respectively. Ending balances In these accounts were $10,500 and $29,000, respectively. Assuming that all relevant information has been presented, what is the company's net cash flows from operating activities? Multiple Cholce $259.500 $232,500. $267,500. $250.000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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