Question

Last year Burch Corporation's cash account decreased by $27,000. Net cash provided by investing activities was $8,200. Net cash used in financing activities was $23,000. On the statement of cash flows, the net cash flow provided by (used in) operating activities was:________.
a) $(27,000)
b) $(41,800)
c) $(12,200)
d) $14,800

Answer 1

Answer:

option (c) $12,200

Explanation:

Data provided in the question:

Decrease in cash account = $27,000      [Negative sign depicts decrease]

Net cash provided by investing activities = $8,200

Net cash used in financing activities = $23,000

Now,

Decrease in cash account = Cash from operating activities + Cash from investing activities - Cash used financing activities

or

- 27,000 = Cash from operating activities + $8,200 - $23,000

or

Cash from operating activities = - $27,000 + $23,000 - $8,200

= - $12,200

[negative sign depicts cash outflow is greater than cash inflow]

Hence,

Answer is option (c) $12,200