Question

Firm E cash sales in January are​ $100,000, its accounts receivable payments for January are​ $100,000, its beginning cash for January is​ $50,000, and there are no other cash inflows for January. Its accounts payable payments for the January are​ $100,000 and its wages and salaries for January are​ $100,000, and its interest payments for January are​ $50,000. What is its net cash flow for January if there are no other cash​ flows?

Answer 1

-$50,000

Step-by-step explanation:

Cash sales = $100,000

Accounts receivable payment = $100,000

Beginning cash = $50,000

Accounts payable payment = $100,000

Wages & salary = $100,000

Interest payment = $50,000

So, Net Cash Flow = (Cash Sales + Accounts receivable payment) - (Accounts payable payment + Wages & salary + Interest Payment)

= ($100,000 + $100,000) - ($100,000 + $100,000 + $ 50,000)

= $200,000 - $250,000

= -$50,000