Question

During the quarter ended 3/31/2015, Clarke Biscuits Inc. collected $100 of cash from customers, paid $60 of cash to suppliers, paid $20 of cash to employees and other creditors, and recorded $10 of depreciation expense. There were no other cash flows related to operating activities.1. What was Clarke’s Cash Flow from Operations during the quarter ended 3/31/2015?

Answer 1

Answer:

$20

Explanation:

Given that,

Cash collected from the customers = $100

Cash paid to suppliers = $60

Cash paid to employees and other creditors = $20

Depreciation expense = $10

Therefore,

Clarke’s Cash Flow from Operations during the quarter ended 3/31/2015:

= Cash collected from the customers - Cash paid to suppliers - Cash paid to employees and other creditors

= $100 - $60 - $20

= $20