Question

Below are cash transactions for Goldman Incorporated, which provides consulting services related to mining of precious metals.

1. Cash used for purchase of office supplies, $2,100.
2. Cash provided from consulting to customers, $47,600.
3. Cash used for purchase of mining equipment, $77,000.
4. Cash provided from long-term borrowing, $64,000.
5. Cash used for payment of employee salaries, $24,400.
6. Cash used for payment of office rent, $12,400.
7. Cash provided from sale of equipment purchased in c. above, $22,900.
8. Cash used to repay a portion of the long-term borrowing in d. above, $42,000.
9. Cash used to pay office utilities, $4,700.
10. Purchase of company vehicle, paying $10,400 cash.

Required:

Calculate cash flows from operating activities. (List cash outflows as negative amounts.)

Answer 1

Calculation of net cash flow from operating activities

Cash for purchase of office supplies	Operating outflow	-2,100
Cash provided from consulting to customers	operating inflow	47,600
cash for purchase of mining equipment	investing outflow	Not to be considered
cash from long term borrowing	financing inflow	Not to be considered
cash for payment of employee salaries	operating outflow	-24,400
cash for payment of office rent	operating outflow	-12,400
cash form sale of equipment	investing inflow	Not to be considered
Cash to repay longterm borrowing	financing outflow	Not to be considered
Cash to pay office utilities	operating outflow	-4,700
cash for vehicle purchase	investing outflow	Not to be considered
Net cash from operating activities		4,000