Calculate Cash from Operating Activities Using the Following Information: Profit

question 35

Multiple Choice

Calculate cash from operating activities using the following information: Profit $148,000.
Depreciation $40,000.
Inventory increased by $10,000.

• A)$148,000.
• B)$178,000.
• C)$188,000.
• D)$98,000.

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Definitions:

Operating Cycle

The average period of time between the acquisition of materials or services and the final cash realization from those activities in a company.

Accounts Receivable Period

Accounts Receivable Period is the average number of days it takes for a company to collect payment from its customers after a sale has been made.

Cash Cycle

The period of time it takes for a business to convert its investments in inventory and other resources into cash flows from sales.

Inventory Turnover Rate

Inventory turnover rate measures how often a company sells and replaces its stock of goods during a certain period, indicating the efficiency of inventory management.