Question

BobCat company originated in December 2017. BobCat follows accrual accounting principles. The following transactions happened during the year:

December 2: Performed services on account for $45,000.
December 15: Collected $32,400 of the accounts receivable.
December 31: Paid the utility expense of $1,200.
Recorded $8,800 of accrued salaries at the end of the year.

What is net cash flow from operating activities?

• A. 32,400 inflow

• B. 10,000 outflow

• C. 22,400 inflow

• D. 31,200 inflow

Answer 1

Correct answer--------D. 31,200 inflow

Working

Cash collection from customers	$ 32,400.00
Cash payment for utilities	$ (1,200.00)
Net cash inflow from operating activities	$ 31,200.00

Accrued salary and service on account will not be included above as they do not affect cash balance.