Monterey Corporation reports net income of $260,000 that includes depreciation expense of $30,000 and amortization expense of $20,000. What is the company’s cash inflows from operating activities?Multiple Choice$280,000$210,000$290,000$310,000
Question
Monterey Corporation reports net income of 30,000 and amortization expense of 280,000290,000$310,000
Solution
The cash inflows from operating activities can be calculated by adding back the non-cash expenses (depreciation and amortization) to the net income.
Here's the step-by-step calculation:
- Start with the net income: $260,000
- Add back the depreciation expense: 30,000 = $290,000
- Add back the amortization expense: 20,000 = $310,000
So, the company’s cash inflows from operating activities is $310,000.
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