After tax cash flow - Accounts Cash Flow Statement

Document Sample

```					              Sub: Accounts                                                               Topic: Cahs flow statement

Question:
Computation of cash flow from operations

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Jones Company

Financial Information

December 2003 December 2004

Net income \$1,500 \$3,000

Accounts receivable 750 750

Accumulated depreciation 1,125 1,500

Common stock 4,500 5,250

Paid-in capital 7,500 8,250

Retained earnings 1,500 2,250

Accounts payable 750 750

Based on the information in Table 3-1, calculate the after tax cash flow from operations for
2004 (no assets were disposed of during the year, and there was no change in interest payable
or taxes payable):

a. \$3,375

b. \$2,250

c. \$3,750

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Sub: Accounts                                                               Topic: Cahs flow statement

d. \$3,000

Solution:
Ans: A

Jones Company
Cash Flow from Operating Activities
for the year 2004

Net Income                              \$3,000
Depreciation                             \$375
Change in Accounts
Receivable                                     0
Change in Accounts
Payable                                        0
Cash provided by
Operations                              \$3,375

** End of the Solution **

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