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"Stimpleton Company engages in the following cash payments: Purchase equipment $ 3,900 Pay rent 500 Repay loan to the bank 4,300 Pay workers’ salaries 1,100 What is the total amount of cash paid for operating activities?"

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Answer:

csh used for operatng activities 1,600

Step-by-step explanation:

the operatng activities will be the cash outflow for business day-to-day operation

the rent is an operational cost, as the rented space is used daily for the business.

the workers salaries are operating activities, they work and provide their work to make the business operate

The equipment is an investment activity. the equipment will generate cash over the course of his useful life, is an investing activity. It decreases cash now, to increases in the future.

The Loan is a financing activity, the company is paying a loan which in a previous period provide cash.

So, total operating activities:

rent 500

salaries 1,100

total 1,600

User Martin Wedvich
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