Playdough Products Earned Net Income of $400,000 in 2011

question 4

Essay

Playdough Products earned net income of $400,000 in 2011.The firm increased its accounts receivable during the year by $250,000.The book value of its assets declined by the year's depreciation charge,which was $180,000,and the market value of its assets increased by $20,000.Based only on this information,how much cash did Playdough Products generate during the year?
Please ignore taxes for this problem.

---

Definitions:

Operating Revenues

Revenues generated from a company's primary business activities.

Assets

Resources owned by a business that have economic value and are expected to provide future benefit.

Liabilities

Financial obligations or debts that a company owes to others, which must be paid back in the future.

Operating Income

A measure of a company's profit generated from its core business operations, excluding deductions of interest and taxes.