Astoria Co. had the following transactions during the month of August, 2010:
* Cash received from bank loans was $20,000.
* Dividends of $9,500 were paid to shareholders in cash.
* Revenues earned and received in cash amounted to $33,500
* Expenses incurred and paid were $26,000
-Refer to the above data. For the month of August, 2010, net cash flows from operating activities for Astoria were:
A) $33,500.
B) $7,500.
C) $20,000.
D) $26,000.

Question

Quizplus · Accepted Answer

Net cash flows from operating activities are calculated by subtracting expenses paid from revenues earned and received in cash:

$33,500 (Revenues earned and received in cash) 
- $26,000 (Expenses incurred and paid) 
= $7,500

Therefore, the net cash flow from operating activities for Astoria for the month of August, 2010 was $7,500.