Question

For the current year, Klay Corporation reports the following information:

Net cash inflows from investing activities: $ 40,000

Net cash inflows from financing activities: $ 45,000

Cash at the beginning of the year: $ 340,000

Cash at the end of the year: $ 420,000

What was the company’s cash flows from operating activities?

A cash inflow of $5,000

A cash inflow of $15,000

A cash outflow of $5,000

A cash outflow of $15,000

Answer 1

Answer:

A cash outflow of $5,000

Explanation:

the sum of cash flows from the operating, investing and financing activities must equal the net change in cash during the period

Answer 2

The company’s cash outflows from operating activities is $5,000.

Particulars                                                                 Amount

Cash at the end of the year                                     $420,000

Less: Net cash inflows from investing activities     ($40,000)

Less: Net cash inflows from financing activities     ($45,000)

Less: Cash at the beginning of the year                 ($340,000)

Cash outflows from operating activities               $5,000      

In conclusion, the Correct Option is C. because the company’s cash outflows from operating activities is $5,000.

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