Question

Bad Brad's BBQ had cash flows for the year as follows ($ in millions): CASH RECEIVED FROM: Customers $1,800 Interest on investments 200 Sale of land 100 Sale of common stock 600 Issuance of debt securities 2,000 CASH PAID FOR: Interest on debt $300 Income tax 80 Debt principal reduction 1,500 Purchase of equipment 4,000 Purchase of inventory 1,000 Dividends on common stock 200 Operating expenses 500 Bad Brad's would report net cash inflows (outflows) from operating activities in the amount of:

Answer 1

Net Cash flow from Operating activities $120

Step-by-step explanation:

The preparation of the Cash Flows from Operating Activities - Direct Method is shown below:

Cash flow from Operating activities - Direct method

Cash received from customers $1,800

Interest on investments $200

Interest on debt -$300

Income tax -$80

Purchase of inventory -$1,000

Operating expenses -$500

Net Cash flow from Operating activities $120