Accounting homework question?

Question

Theo Door Company reports 2006 net income of $9,500; depreciation expense of $1,500; an increase in accounts receivable during the year of $800; and an increase of $500 in interest earned but not received. Based on this information, net cash flow from operations in 2006 is

a.$ 9,300
b.$ 9,700
c.$10,200
d.$11,300

Answer 1

It is 9,700

Net income is 9,500.
You add depreciation, which was a cost but not an outgoing cash
you subtract receivables, since it is not collected
you subtract interest earned, since it is part of net income, but not received.

so 9,500 + 1,500 - 800 - 500 = 9,700

One could argue that it should be 10,200 to exclude interest, because it could be deemed not part of operations, but then you also should have started with operational profit and not net income.

Answer 2

a)9,300. You take the 9500 then subtrack the 1500, then add the 800, then add the 500, and this gives you 9300. Good luck