Firm E cash sales in January are $100,000,its accounts receivable payments for January are $100,000,its beginning cash for January is $50,000,and there are no other cash inflows for January.Its accounts payable payments for the January are $100,000 and its wages and salaries for January are $100,000,and its interest payments for January are $50,000.What is its net cash flow for January if there are no other cash flows?

Question

Quizplus · Accepted Answer

The net cash flow for January can be calculated by adding all cash inflows and subtracting all cash outflows. Cash inflows include cash sales of $100,000 and accounts receivable payments of $100,000, totaling $200,000. The beginning cash balance is not counted as an inflow for the purpose of calculating net cash flow for the month. Cash outflows include accounts payable payments of $100,000, wages and salaries of $100,000, and interest payments of $50,000, totaling $250,000. Therefore, the net cash flow for January is $200,000 (inflows) - $250,000 (outflows) = -$50,000.

Firm E Cash Sales in January Are $100,000,its Accounts Receivable