Question

From the information below, the net cash flow from operating activities is: Cash contributions from owner...

  1. From the information below, the net cash flow from operating activities is:

Cash contributions from owner $8000

            Receipt of bank interest $50

            Dividend payment to shareholders $2500

            Cash receipts from customers $4500

            Cash purchase of computer $2100

            Depreciation on computer $50

            Cash payments to suppliers $3500

            a. an inflow of $5500.

            b. an inflow of $1050.

            c. an outflow of $2100.

            d. an inflow of $6900.

Business   Accounting   
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Homework Answers

Answer #1

Solution:

Operating Cash Flow

Cash Inflow (A)   
Receipt of bank interest $50
Cash Receipts from customers $4,500
$4,550
Cash Outflow (B)
Cash Payment to Suppliers $3,500
Net Cash Flow from Operating Activities (A - B) $1,050

Therefore,

There is Net Cash inflow of $1,050

Note:Cash contributions from owner,Dividend payment to shareholders, cash purchase and depreciation of computer do not form part of operating activities in cash flow statement.

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