Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions:
1) issued stock for $40,000 2) borrowed $25,000 from its bank
3) provided consulting services for $39,000 cash
4) paid back $15,000 of the bank loan
5) paid rent expense for $9,000
6) purchased equipment for $12,000 cash
7) paid $3,000 dividends to stockholders
8) paid employees' salaries of $21,000
What is Yowell's net cash flow from operating activities?
A) Inflow of $6,000
B) Inflow of $9,000
C) Inflow of $18,000
D) Inflow of $30,000

Question

Quizplus · Accepted Answer

The net cash flow from operating activities is calculated by adding up the cash inflows and subtracting the cash outflows from providing consulting services and paying employees' salaries. 
Cash inflow from consulting services = $39,000 
Cash outflow for employees' salaries = ($21,000) 
Net cash flow from operating activities = $39,000 - $21,000 = $18,000 
Therefore, the correct answer is B.

Yowell Company Began Operations on January 1, Year 1