At the end of April, the Blue Water Company sent out statements to customers for April charges totalling $100 000. During April, the company received $85 000 from customers for water bills incurred during March. Blue's employees earned $35 000 during April, but by month end only $30 000 had been paid. Determine the net cash flow from operations and net profit from operations for the month of April.
Net profit Net cash flow
A) $65 000 $85 000
B) $70 000 $55 000
C) $65 000 $55 000
D) $50 000 $70 000

Question

Quizplus · Accepted Answer

To calculate the net cash flow from operations:
- Start with the April charges of $100 000.
- Subtract the payments received from customers for March bills, which is $85 000.
- Subtract the amount paid to employees, which is $30 000.
Net cash flow from operations = $100 000 - $85 000 - $30 000 = $55 000

To calculate the net profit from operations:
- Start with the April charges of $100 000.
- Subtract the cost of employees, which is $35 000.
Net profit from operations = $100 000 - $35 000 = $65 000

Therefore, the best choice is C, with a net cash flow from operations of $55 000 and a net profit from operations of $65 000.

At the End of April, the Blue Water Company Sent