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Answer: 11,500.
The correct calculation for cash flow from operating activities is: - **Net income**: 10,000 - **Add: Decrease in working capital**: 2,000 (a decrease in working capital is a source of cash) - **Subtract: Gain on debt retirement**: 500 (a gain is a non-operating item and should be excluded from operating cash flow) Thus, the correct cash flow from operating activities is **10,000 + 2,000 - 500 = 11,500**. **Why not A or C?** - **A** incorrectly reverses the signs for all adjustments, leading to an incorrect total of 8,500. - **C** incorrectly adds the gain on debt retirement instead of subtracting it, resulting in an incorrect total of 12,500.
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An analyst collects the following financial data (in $ thousands) for a company:
Based on this information, the cash flow from operating activities (in $ thousands) is:
A
8,500.
B
11,500.
C
12,500.