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Lense Laboratories' net income was $280,000. Given the account information below, what is the net operating cash flows for Lense Laboratories? Increase in Accounts Receivable $69,000 Increase in Salaries Payable $53,500 Decrease in Inventory $31,500 Depreciation Expense $46,500 Increase in Prepaid Insurance $3,900 $369,600 $484,400 $283,400 $338,600

Respuesta :

Answer: Option (D) is correct.

Explanation:

Given that,

Net income = $280,000

Increase in Accounts Receivable = $69,000

Increase in Salaries Payable = $53,500

Decrease in Inventory = $31,500

Depreciation Expense = $46,500

Increase in Prepaid Insurance = $3,900

Cash flow from operating activities:

= Net income - Increase in Accounts Receivable + Increase in Salaries Payable + Decrease in Inventory + Depreciation Expense - Increase in Prepaid Insurance

= $280,000 - $69,000 + $53,500 + $31,500 + $46,500 - $3,900

= $338,600

The net operating cash flows are $338,600.

Calculation of the net operating cash flows:

Since

Net income = $280,000

Increase in Accounts Receivable = $69,000

Increase in Salaries Payable = $53,500

Decrease in Inventory = $31,500

Depreciation Expense = $46,500

Increase in Prepaid Insurance = $3,900

So,

Cash flow from operating activities is

= Net income - Increase in Accounts Receivable + Increase in Salaries Payable + Decrease in Inventory + Depreciation Expense - Increase in Prepaid Insurance

= $280,000 - $69,000 + $53,500 + $31,500 + $46,500 - $3,900

= $338,600

Thus, The net operating cash flow is $338,600.

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