Question

The following transactions occurred during Year 2: Issued common stock for $19,000 cash. ABC borrowed an additional $11,000 from Chris Bank. ABC earned $9,000 of revenue on account. ABC incurred $4,000 of operating expenses on account. Cash collections of accounts receivables were $6,000. ABC provided additional services to customers for $1,000 cash. ABC purchased land for $14,000. ABC used $3,000 in cash to make a partial payment on its accounts payable. ABC declared and paid a $200 dividend to the stockholders On December 31 ABC had accrued salaries of $4,000. What is the net cash flow from operating activities shown on the statement of cash flows for the year ending December 31, Year 2

Answer 1

Answer: $2000

Explanation:

The net cash flow from operating activities shown on the statement of cash flows for the year ending December 31, Year 2 can be calculated below:

Revenue: = $9000 + $1000 = $10,000

Less: Expenses

Operating expenses: $4000

Accrued salary expenses: $4000

Total expense: $8000

Net income = Revenue - Expense

= $10000 - $8000

= $2000