Net income 400000 depreciation 20000 increase in A/R 5000 Decrease in A/P 6000 Decrease in prepaid rent 6000 increase in accrual revenue 8000

Net income …………400,000 + Depreci@tion………20,000 + Dec. in pp rent ……6,000 - Inc.in A/R ……… (5,000) - Inc. in accru rev..(8,000) - Dec. in A/p …… (6,000) = CF from op ……407,000 So, choice A is the answer

Answer option >>>>>>>>>>>>>>>>>>>> A-407000

Cash Flow Statement

 

Net Income.........................................................................4,00,000

Depreciation .....................20,000

Increase in A/R ................. (5,000)

Decrease in A/P................. (6,000)

Decrease in PP Rent..........  6,000

Increase in Ac. Revenue......(8,000)

 

             

Hence the Cash Flow will be  4,07,000. (Option A)                           

(B) is the Correct Ans.

 

 - Depreciation added back

 - Increase in Assets Outflow & Vice Versa

 - Increase in Liabilities Inflow & Vice Versa

Answer ( B )is the correct answer Thank you