Final answer:
The florist's cash flow is calculated by subtracting total expenses from total income, resulting in a negative cash flow of $375 for the month, indicating that the expenses are higher than the income.
Step-by-step explanation:
Calculating Cash Flow
To calculate the cash flow for the florist, we need to consider the monthly cash sales, any other income such as interest income, and subtract all the expenses which include the cost of goods sold, fixed expenses, and variable expenses. In this scenario, the cash sales are $5,300, and the interest income is $200. The cost of goods sold is $1,750, fixed expenses amount to $2,150, and the variable expenses are $1,975. Using the formula:
Cash Flow = Total Income - Total Expenses
we calculate the cash flow as follows:
Total Income = Cash Sales + Interest Income = $5,300 + $200 = $5,500
Total Expenses = Cost of Goods Sold + Fixed Expenses + Variable Expenses = $1,750 + $2,150 + $1,975 = $5,875
Cash Flow = Total Income - Total Expenses = $5,500 - $5,875 = -$375
Thus, the florist is expected to have a negative cash flow of $375 for that month, which suggests that expenses exceed income.