Question

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?

Answer 1

Answer:

$11,000

Explanation:

Data provided

Provided consulting services = $50,000

Paid rent expenses = $12,000

Paid employee salaries = $27,000

The calculation of Yi's net cash flow from operating activities is given below:-

Yi's net cash flow from operating activities = Provided consulting services - Paid rent expenses - Paid employee salaries

= $50,000 - $12,000 - $27,000

= $11,000

Sp, for computing the Yi's net cash flow from operating activities we simply applied the above formula.

Answer 2

Answer:

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.