covert the 2012 net income to operating cash flows 

 

2011 2012 2011 2012 Cash 200 230 Accounts Payable 100 85 Receivable 400 345 Notes payable 400 490 Inventory 600 805 Total Current Liabilities 500 575 Total Current Assets 1,200 1,380 Long-term Debt 200 200 Fixed Assets Total Assets 1,500 1,500 Common Stock 1,600 1,600 Retained Earnings 400 505 2,700 2,880 Total Liabilities and Stockholder's Equity 2,700 2,880 Question: Convert the 2012 net income to operating cash flows. Solution: 2012 Cash Flow from Operations Net Income Garcia Corporation Add: Depreciation less: change in Accounts Receivable less: change in Inventory add: change in Accounts Payable Cash Flow from Operations 540 600 55 =-(345-400) -205=- - (805-600) -15 = +(85-100) 975