During the year,Burton Company had cash collections from customers of $100,000,cash paid to employees of $16,000,cash paid to suppliers of $50,000,cash used to retire long-term bonds of $16,000,and cash payments for dividends of $10,000.The net cash flow from operating activities during the year was:
A) $8,000.
B) $34,000.
C) $18,000.
D) $50,000.

Question

Quizplus · Accepted Answer

The net cash flow from operating activities can be calculated using the indirect method of the cash flow statement.

Net cash flow from operating activities = Cash collections from customers - Cash paid to employees - Cash paid to suppliers 
= $100,000 - $16,000 - $50,000 
= $34,000

Cash used to retire long-term bonds and cash payments for dividends are financing activities and not included in the calculation of net cash flow from operating activities.

During the Year,Burton Company Had Cash Collections from Customers of $100,000,cash