Question

Husky Company has provided the following information for its most recent year of operation:

Cash collected from customers totaled $91,200.

Cash borrowed from banks totaled $35,500.

Cash paid to employees for salaries totaled $34,000.

Cash received from selling Husky common stock to stockholders totaled $60,000.

Cash payments to banks for repayment of money borrowed totaled $9,400.

Cash paid to suppliers totaled $14,400.

Land costing $38,000 was sold for $38,000 cash.

Cash paid for dividends to stockholders totaled $5,200.

How much was Husky's cash flow from operating activities?

Multiple Choice

• $47,400

• $42,800

• $31,300

• $35,500

Answer 1

Answer: $42,800

Explanation:

Particulars	Amount ($)
Cash collected from customers	91,200
Cash paid to employees for salaries	(34,000)
Cash paid to suppliers	(14,400)
Net cash flow from Operating activities	$42,800

Note:

1) cash borrowed from bank $35,500 is a Financing activity with positive cash flow.

2) cash received from selling common stock to stockholders $60,000 is a Financing activity with positive cashflow.

3) Repayment of money borrowed from bank $9,400 is a Financing activity with negative cashflow.

4) Land sold for cash $38,000 is an Investing activity with positive cashflow.

5) Cash paid for dividends to stockholders $5,200 is a Financing activity with negative cashflow.