During the month of May, Henderson Company had the following transactions: Revenues of $52,000...

Question:

During the month of May, Henderson Company had the following transactions:

Revenues of $52,000 were earned and received in cash.

Bank loans of $3,000 were paid off.

Equipment of $12,000 was purchased.

Expenses of $32,800 were paid.

Stockholders purchased additional shares for $14,000 cash.

A statement of cash flows for May would report net cash flows from operating activities of:

a. 52,000.

b. 18,200.

c. 19,200.

d. 37,000.

What is Operating Cash Flow:

A company's Operating Cash Flow is presented at the very top of the cash flow statement. The Operating Cash Flow includes the cash generated or used by the company's core operations (i.e. income) and changes to the working capital balances.

Answer and Explanation:

See the calculation below.

Operating cash flow = Cash revenue - Expenses paid

= 52,000 - 32,800

=$19,200

The answer is thus C.


Learn more about this topic:

Loading...
Operating Cash Flow: Definition & Examples

from Finance 101: Principles of Finance

Chapter 10 / Lesson 4
9.8K

Related to this Question

Explore our homework questions and answers library