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Nelson Company experienced the following transactions during 2016,its first year in operation.
1.Issued $12,000 of common stock to stockholders.
2.Provided $4,600 of services on account.
3.Paid $3,200 cash for operating expenses.
4.Collected $3,800 of cash from accounts receivable.
5.Paid a $200 cash dividend to stockholders.
-The amount of net cash flow from operating activities shown on Nelson Company's 2016 statement of cash flows is
A)$400.
B)$600.
C)$1,400.
D)$1,200.

Question

Use the following information for questions 
Nelson Company experienced the following transactions during 2016,its first year in operation.
1.Issued $12,000 of common stock to stockholders.
2.Provided $4,600 of services on account.
3.Paid $3,200 cash for operating expenses.
4.Collected $3,800 of cash from accounts receivable.
5.Paid a $200 cash dividend to stockholders.
-The amount of net cash flow from operating activities shown on Nelson Company's 2016 statement of cash flows is
A)$400.
B)$600.
C)$1,400.
D)$1,200.

Quizplus · Accepted Answer

Net cash flow from operating activities is calculated as the difference between cash inflows and cash outflows from operating activities. Therefore, the net cash flow from operating activities for Nelson Company can be calculated as: 
Cash inflows from operating activities = $3,800 
Cash outflows from operating activities = $3,200 
Net cash flow from operating activities = $3,800 - $3,200 = $600 
Thus, the answer is B).

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