Question

The following are summary cash transactions that occurred during the year for Hilliard Healthcare Co. (HHC)

Particulars	Amount$
Cash received from :
Customers	6,60,000
Interest on note receivable	12,000
Collection of note receivable	1,00,000
Sale of land	40,000
Issuance of common stock	2,00,000
Cash paid for :
Interest on note payable	18,000
Purchase of equipment	1,20,000
Operating expenses	4,40,000
Dividends to shareholders	30,000

Prepare the cash flows from operating activities section of HHC’s statement of cash flows using the direct method

Answer 1

Statement of Cash flows : Statement of cash flows refers to the financial statement that details a company's cash inflows and outflows over a specific time period. It details the operating, investing, and financing activity that has an impact on a company's cash flows over a specific time period.

Cash flows from operating activities of Hilliard Healthcare Co. (HHC)

Particulars	Amount$	Amount$
Cash inflows :
Collection from customers	660,000
Interest on note receivable	12,000
Total cash inflows		672,000
Cash outflows :
Interest on note payable	18,000
Payment of operating expenses	440,000
Total cash outflows		458,000
Net cash flows from operating activities		214,000

Therefore,the cash flow from the operating activities of the  Hilliard Healthcare Co. (HHC) is $214,000