Based on the following information for Pinkerly Inc., a fi ctitious company, what arethe total adjustments that the company would make to net income in order to deriveoperating cash fl ow?Year EndedIncome statement item 12/31/2009Net income $30 millionDepreciation $7 millionBalance sheet item 12/31/2008 12/31/2009 ChangeAccounts receivable $15 million $30 million $15 millionInventory $16 million $13 million ($3 million)Accounts payable $10 million $20 million $10 millionA . Add $5 million.B . Add $21 million.C . Subtract $9 million.
Based on the following information for Pinkerly Inc., a fi ctitious company, what arethe total adjustments that the company would make to net income in order to deriveoperating cash fl ow?Year EndedIncome statement item 12/31/2009Net income $30 millionDepreciation $7 millionBalance sheet item 12/31/2008 12/31/2009 ChangeAccounts receivable $15 million $30 million $15 millionInventory $16 million $13 million ($3 million)Accounts payable $10 million $20 million $10 millionA . Add $5 million.B . Add $21 million.C . Subtract $9 million.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 55PSA
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Based on the following information for Pinkerly Inc., a fi ctitious company, what are
the total adjustments that the company would make to net income in order to derive
operating cash fl ow?
Year Ended
Income statement item 12/31/2009
Net income $30 million
Depreciation $7 million
Balance sheet item 12/31/2008 12/31/2009 Change
Accounts receivable $15 million $30 million $15 million
Inventory $16 million $13 million ($3 million)
Accounts payable $10 million $20 million $10 million
A . Add $5 million.
B . Add $21 million.
C . Subtract $9 million.
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