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Nelson Company experienced the following transactions during Year 1, its first year in operation.

Acquired $12,000 cash by issuing common stock
Provided $4,600 of services on account
Paid $3,200 cash for operating expenses
Collected $3,800 of cash from customers in partial settlement of its accounts receivable
Paid a $200 cash dividend to stockholders

-What is the amount of net cash flows from operating activities that will be reported on the Year 1 statement of cash flows?
A)$400
B)$600
C)$1,400
D)$1,200

Question

[The following information applies to the questions displayed below.]
 
Nelson Company experienced the following transactions during Year 1, its first year in operation.

Acquired $12,000 cash by issuing common stock 
Provided $4,600 of services on account 
Paid $3,200 cash for operating expenses 
Collected $3,800 of cash from customers in partial settlement of its accounts receivable 
Paid a $200 cash dividend to stockholders

-What is the amount of net cash flows from operating activities that will be reported on the Year 1 statement of cash flows?
A)$400
B)$600
C)$1,400
D)$1,200

Quizplus · Accepted Answer

Net cash flow from operating activities = Cash collections of $3,800 - Cash payments for expenses of $3,200 = $600
The cash paid for dividends would be reported as a financing activity.

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