Question

The following schedule of cash receipts and payments relates to Yellowstone, Inc. for the year 20X8:

Cash receipts:
From customers	$348,000
From issuance of bonds payable	162,000
From sale of delivery truck	9,000
Cash payments:
For purchase of equipment	$ 70,800
To employees and suppliers	246,000
For interest expense	17,400
To shareholders for dividends	74,400
For purchase of treasury stock	14,400
For income taxes	21,600

Required: What is the cash flow from operations for Yellowstone, Inc. for 20X8?

Answer 1

• Working

Cash receipts:
From customers	$            348,000
Cash payments:
To employees and suppliers	$          (246,000)
For interest expense	$            (17,400)
For income taxes	$            (21,600)
Net Cash Flows from Operations	$              63,000 = Answer

• Answer = $ 63,000
• Note:

Cash receipts:		Activities' as per Statement of Cash Flows
From customers	$              348,000	Operating
From issuance of bonds payable	$              162,000	Financing
From sale of delivery truck	$                   9,000	Investing
Cash payments:		Activities' as per Statement of Cash Flows
For purchase of equipment	$                70,800	Investing
To employees and suppliers	$              246,000	Operating
For interest expense	$                17,400	Operating
To shareholders for dividends	$                74,400	Financing
For purchase of treasury stock	$                14,400	Financing
For income taxes	$                21,600	Operating