Using the Indirect Method,calculate the Amount of Net Cash Flows

question 109

Essay

Using the indirect method,calculate the amount of net cash flows from operating activities from the following data.Show your work.
$\begin{array}{lrlr}\text { Net Income } & \$ 112,000 & \text { Beginning Accounts Payable } & \$ 6,000 \\\text { Beginning Accounts } & & \text { Ending Accounts Payable } & 5,600 \\\text { Receivable } & 10,000 & \text { Depreciation Expense } & 20,400\\\text { Ending Accounts Receivable } & 8,800 & \text { Amortization of Intangible } & \\\text { Beginning Prepaid Expenses } & 2,000 & \text { Assets } & 1,600 \\\text { Ending Prepaid Expenses } & 2,800 & \text { Dividends Declared and Paid } & 4,400\end{array}$

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Definitions:

Zero Coupon Interest Rate

A rate of interest reflecting the discount from par at which zero-coupon bonds are sold. This rate is not paid annually but at maturity.

Arbitrage Profit

Profit earned from buying and selling the same asset in different markets to take advantage of differing prices for the same asset.

Stock Index

A measurement of a section of the stock market calculated from the prices of selected stocks, representing a specific market or sector.

Futures Contracts

Financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price.