Question

During the month of May, the Henderson Company had the following transactions:

* Revenues of $60,000 were earned and received in cash.
* Bank loans of $9,000 were paid off.
* Equipment of $20,000 was purchased.
* Expenses of $36,800 were paid.
* Stockholders purchased additional shares for $22,000 cash.

A statement of cash flows for May would report net cash flows from operating activities of:

Answer 1

The net cash flows from operating activities for Henderson Company during the month of May would be $23,200, calculated by subtracting expenses ($36,800) from revenues ($60,000).

Step-by-step explanation:

The student asked about the net cash flows from operating activities for Henderson Company during the month of May.

To calculate this, we consider revenues and expenses related to the company's main business operations. The transactions listed include revenues of $60,000 (cash received) and expenses of $36,800 (cash paid).

Net cash flows from operating activities are obtained by subtracting the cash paid for expenses from the cash received from revenues.

So, the calculation would be $60,000 (revenues) - $36,800 (expenses) = $23,200 net cash flows from operating activities.

The net cash flows from operating activities for the month of May can be calculated by summing up all the cash inflows and subtracting the cash outflows.

In this case, the cash inflows from operating activities are the revenues earned and received in cash, which amount to $60,000. The cash outflows from operating activities are the expenses paid, which amount to $36,800. Therefore, the net cash flows from operating activities for May would be $60,000 - $36,800 = $23,200.