Nelson Company experienced the following transactions during Year 1, its first year in operation.Issued $8,000 of common stock to stockholdersProvided $4,300 of services on accountPaid $2,100 cash for operating expensesCollected $2,900 of cash from accounts receivablePaid a $200 cash dividend to stockholdersWhat is the of net cash flow from operating activities shown on the Year 1 statement of cash flows?
A) $600
B) $800
C) $2,000
D) $2,200

Question

Quizplus · Accepted Answer

Net cash flow from operating activities is calculated by considering cash inflows and outflows from normal business operations. Here, the cash inflow is $2,900 (cash collected from accounts receivable), and the cash outflow is $2,100 (cash paid for operating expenses). Therefore, the net cash flow from operating activities is $2,900 - $2,100 = $800.

Nelson Company Experienced the Following Transactions During Year 1, Its