Reference no: EM132681977

Questions -

Q1. Angela was given a direct cash flow statement prepared by a small company that her boss was considering acquiring. The cash from operations was $470,000, cash used in investing was $330,000 and cash from financing showed a use of $100,000. In addition, the balance sheet showed the accounts receivable had increased by $70,000, the accounts payable had decreased by $10,000 and inventory had increased by $15,000. Net income was $510,000. Her company uses the indirect method of cash flow statements, so her boss wanted to know how much cash from operations would be using that format.

Q2. Olga's boss is really excited. His company is doing an acquisition and the new company will add $2,000,000 in depreciation. He is looking at this year's cash flow statement and trying to figure out how much more cash they would have had if they already had the $2,000,000 in depreciation. He has asked Olga to calculate how much cash from operations would have increased.