Yi Company began operations on January 1, 2013. During 2013, the company engaged in the following cash transactions: 1) issued stock for $52,000 2) borrowed $31,000 from its bank 3) provided consulting services for $50,000 4) paid back $21,000 of the bank loan 5) paid rent expense for $12,000 6) purchased equipment costing $18,000 7) paid $3,600 dividends to stockholders 8) paid employees' salaries, $27,000 What is Yi's net cash flow from operating activities?

Question

Zain Morrow

Business

4 May, 12:25

Yi Company began operations on January 1, 2013. During 2013, the company engaged in the following cash transactions: 1) issued stock for $52,000 2) borrowed $31,000 from its bank 3) provided consulting services for $50,000 4) paid back $21,000 of the bank loan 5) paid rent expense for $12,000 6) purchased equipment costing $18,000 7) paid $3,600 dividends to stockholders 8) paid employees' salaries, $27,000 What is Yi's net cash flow from operating activities?

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Answers (1)

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Lillian · Answer 1

Yi's net cash flow from operating activities is $11,000.

Explanation:

Firstly, we need to determine the net income as follows:

Yi Company Net income

Service revenue from consulting service $50,000

Rent expense ($12,000)

Salaries ($27,000)

Net income $11,000

The amount above $11,000 represents cash flows from operating activities since every other time affects net cash flows from financing activities or investing activities.