In the financial year ending 31 December, Price Pty Ltd collected $80 000 from customers, paid wages to employees of $10 000, and received dividends of $12 000. What was the net cash flow from operating activities for the financial year ending 31 December?
A) $58 000
B) $70 000
C) $80 000
D) -$12 000

Question

Quizplus · Accepted Answer

Net cash flow from operating activities is calculated by taking the cash inflows from operating activities and subtracting the cash outflows from operating activities. Here, cash collected from customers ($80,000) is an inflow, and wages paid to employees ($10,000) is an outflow. Dividends received ($12,000) are typically considered investing activities, not operating activities. Therefore, the net cash flow from operating activities is $80,000 (inflows) - $10,000 (outflows) = $70,000.

In the Financial Year Ending 31 December, Price Pty Ltd