Use the following to answer questions
Assume the perpetual inventory method is used.
1)Green Company purchased merchandise inventory that cost $64,000 under terms of 2/10,n/30 and FOB shipping point.
2)The company paid freight cost of $2,400 to have the merchandise delivered.
3)Payment was made to the supplier within 10 days.
4)All of the merchandise was sold to customers for $94,000 cash and delivered under terms FOB shipping point with freight cost amounting to $1,600.
-As a result of the above transactions of Green Company,the net cash flow from operating activities was

Question

Quizplus · Accepted Answer

The net cash flow from operating activities is the difference between the cash inflows and outflows from operating activities. In this case, the cash inflows are $94,000 from the sale of merchandise and the cash outflows are $64,000 for the purchase of merchandise, $2,400 for freight costs, and $1,600 for freight costs on the sale of merchandise. Therefore, the net cash flow from operating activities is $94,000 - $64,000 - $2,400 - $1,600 = $27,280 inflow.

Use the Following to Answer Questions