Answered: Calculate Plum Shop’s cash flow from…

Business

Accounting

Calculate Plum Shop’s cash flow from operations for 20X5.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter6: Cash And Internal Control

Section: Chapter Questions

Problem 6.2E

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Question

Plum Shop had cash flows from investing activities of P2,567,000 and cash flows from financing activities of P3,459,000. The balance in the firm’s cash account was P950,000 at the beginning of 20X5 and P1,025,000 at the end of the year. Calculate Plum Shop’s cash flow from operations for 20X5.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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