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Explain the formula and concepts used to arrive at the answer. ...

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Accounting

Explain the formula and concepts used to arrive at the answer.

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Question #: 17 Use the following information on Stable Lifestyle Company to answer the question. Stable Lifestyle Company shows the following information for the year ended 31st of December 2020: Net Profit for year 2020 was $7,000 Income Tax for the year 2020 was $1,350 Accounts receivable decreased by $2,000 Inventories increased by $4,000 Accounts payable decreased by $7,000 Income Tax payable increased by $200 Dividends Payable increased by $4,000 Depreciation expense included in net income was $8.000. During the year, a piece of land held for future expansion was sold for its book value of $8,000 in cash and a new service truck purchase of $14,000 was fully financed through a loan. : The company borrowed $18,000 on a two-year note from the bank. Dividends of $10,000 were declared during the year 2020. Stable Lifestyle Company is preparing its statement of cash flows for the fiscal year 2020. What is the amount of cash flows from operating activities that Stable should record on its statement of cash flows, if the company wishes to maximise its operating cash flows? A. $7,350 B. $6.200 C. $6.000 D. $5.800

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