| Description |
Based on the information in Exhibit 1 for Pinkerly Inc., a fictitious company, what
are the total adjustments that the company would make to net income in order to
derive operating cash flow?
<table style="width:90%;text-align:center">
<caption>Exhibit 1: Pinkerly Inc.</caption>
<tr><td></td><th colspan="3">Year Ended</th></tr>
<tr><td class="left">Income statement</td><td></td><td></td><td></td></tr>
<tr><td class="left">item </td><td></td><td>12/31/2018</td><td></td></tr>
<tr><td class="left">Net income</td><td> </td><td>USD30 million</td><td></td></tr>
<tr><td class="left">Depreciation</td><td></td><td> USD7 million</td><td></td></tr>
<tr><td class="left"></td><td></td><td></td><td></td></tr>
<tr><td class="left">Balance sheet item </td><td>12/31/2017 </td><td>12/31/2018</td><td> Change</td></tr>
<tr><td class="left">Accounts receivable </td><td>USD15 million </td><td>USD30 million </td><td>USD15 million</td></tr>
<tr><td class="left">Inventory </td><td>USD16 million </td><td>USD13 million </td><td>(USD3 million)</td></tr>
<tr><td class="left">Accounts payable </td><td>USD10 million</td><td> USD20 million</td><td> USD10 million</td></tr>
</table> |