The following information is for Cleveland Company:

Additional data for the current year:
(1)Sales on account for the period were $80,000.
(2)Operating expenses for the period were $52,000.
Based on this limited information,what was the net cash inflow from operating activities?
A)$18,000
B)$22,000
C)$28,000
D)$34,000

Question

The following information is for Cleveland Company:

Additional data for the current year:
(1)Sales on account for the period were $80,000.
(2)Operating expenses for the period were $52,000.
Based on this limited information,what was the net cash inflow from operating activities?
A)$18,000 
B)$22,000 
C)$28,000 
D)$34,000

Quizplus · Accepted Answer

Net income = Sales of $80,000 - Operating expenses of $52,000 = $28,000
Net cash flow from operating activities = Net income of $28,000 + Decrease in accounts receivable of $24,000 - Increase in prepaid rent of $12,000 - Decrease in salaries payable of $6,000 = $34,000

The Following Information Is for Cleveland Company