Homework SourseNorris Company experienced the following transactions during
Norris Company experienced the following transactions during 2013, its first year in operation. 1. Issued $9,400 of common stock to stockholders. 2. Provided $5,700 of services on account. 3. Paid $2,450 cash for operating expenses. 4. Collected $3,600 of cash from accounts receivable. 5. Paid a $270 cash dividend to stockholders. The amount of net cash flow from operating activities shown on Norris Company\'s 2013 statement of cash flows is
a)1150 b)880 c)2980 d)3250
Solution
a)1150
Working:
| Cash flow from operating activities include those item which are related with the operation of business. | |||||||||||||
| Issuance of Common stock as well as payment of dividend is financial activities.So, these are not included in operating activities. | |||||||||||||
| Norris Company | |||||||||||||
| Statement of Cash flow | |||||||||||||
| Cash flow from Operating Activities: | |||||||||||||
| Cash paid for operating expense | $ -2,450 | ||||||||||||
| Collection from accounts receivable | $ 3,600 | ||||||||||||
| Net cash flow from operating activities | $ 1,150 | ||||||||||||
