Answer:
The correct option is D. $52,000.
Explanation:
Atlantis’s cash flow from operating activities can be calculated as follows:
Atlantis Trading Inc.
Calculation of Cash Flow from Operating Activities
Items Amount ($)
Net income 45,000
Adjustment to reconcile net income
(Increase) decrease in current assets:
Increase in stock (5,000)
Decrease in accounts receivables 2,000
Increase (decrease) in current liabilities:
Increase in salaries payable 10,000
Cash flow from operating activities (52,000)
The above implies that:
Cash flow from operating activities = Net income - Increase in stock + Decrease in accounts receivables + Increase in salaries payable = $45,000 - $5,000 + $2,000 + $10,000 = $52,000
Therefore, the correct option is D. $52,000.
