In evaluating the cash flow statement of Omega Technologies for the fiscal year ended December 31, 2023, a critical examination of transactions shows the following: Net income: $150,000 Depreciation expense: $30,000 Gain on sale of equipment: $10,000 Decrease in accounts payable: $5,000 Purchase of inventory: $45,000 Issuance of common stock: $100,000 Using the indirect method, what is the cash flow from operating activities reported in the cash flow statement?

Exam

CFA Level 1

Section

Difficulty

Financial Reporting and Analysis

Cash Flow from Operating Activities Calculation

Very Hard Financial Statements Cash Flow Statement

In evaluating the cash flow statement of Omega Technologies for the fiscal year ended December 31, 2023, a critical examination of transactions shows the following:

Net income: $150,000
Depreciation expense: $30,000
Gain on sale of equipment: $10,000
Decrease in accounts payable: $5,000
Purchase of inventory: $45,000
Issuance of common stock: $100,000

Using the indirect method, what is the cash flow from operating activities reported in the cash flow statement?

Cash flow from operating activities is $210,000.

Cash flow from operating activities is $205,000.

Cash flow from operating activities is $195,000.

Hint

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