Question

The Tai Yong Medical Corporation provided services for $7,500 cash during the 2019 accounting period. Tai Yong incurred $6,000 expenses on account during 2019, and by the end of the year, $3,000 of that amount had been paid with cash. Tai Yong paid dividends of $900 to stockholders during the year. Assume that these are the only accounting events that affected Tai Yong during the 2019 accounting period. What is the cash flow from operations for 2019? Group of answer choices

Answer 1

$4,500

Explanation:

The computation of cash flow from operations for 2019 is shown below:-

Cash flows from Operating activities = Cash received for services provided - Expenses

= $7,500 - $3,000

= $4,500

Therefore for computing the cash flow from operating activities we simply applied the above formula i.e. deduct the expenses from the cash received so that the cash flow from operating could come