Net cash flow from operating activities for 2015 for Spencer Corporation was $400,000. The following items are reported on the financial statements for 2015: $\begin{array}{lr}
\text { Cash dividends paid on common stock } & \$ 20,000 \
\text { Depreciation and amortization } & 12,000 \
\text { Increase in accounts receivables } & 24,000
\end{array}$ Based on the information above, Spencer's net income for 2015 was
A) $412,000.
B) $396,000.
C) $364,000.
D) $356,000.

Question

Quizplus · Accepted Answer

Net income = Net cash flow from operating activities + Depreciation and amortization - Increase in accounts receivables - Cash dividends paid on common stock= $400,000 + $12,000 - $24,000 - $20,000= $412,000

Net Cash Flow from Operating Activities for 2015 for Spencer