Nelson Company experienced the following transactions during Year 1, its first year in operation.Acquired $12,000 cash by issuing common stockProvided $4,600 of services on accountPaid $3,200 cash for operating expensesCollected $3,800 of cash from customers in partial settlement of its accounts receivablePaid a $200 cash dividend to stockholdersWhat is the amount of net cash flows from operating activities that will be reported on the Year 1 statement of cash flows?
A)$400
B)$600
C)$1,400
D)$1,200

Question

Quizplus · Accepted Answer

Net cash flows from operating activities are calculated by considering cash received from customers and cash paid for operating expenses. Cash received from customers is $3,800, and cash paid for operating expenses is $3,200. Therefore, net cash flows from operating activities is $3,800 - $3,200 = $600.

Nelson Company Experienced the Following Transactions During Year 1, Its