On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,390 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts. Retained earnings, October 1 as $0. Cash $ 13,210 Cash dividends $ 1,460 Accounts receivable 13,320Consulting revenue 13,320 Office supplies 2,720 Rent expense 2,950 Land 45,910 Salaries expense 6,290 Office equipment 17,350 Telephone expense 830 Accounts payable 7,970 Miscellaneous expenses 640 Common stock 83,390 Using the above information prepare an October 31 balance sheet for Ernst Consulting.

The Cash Flows from Operating Activities is $104,000. The right answer is b.

Explanation:

According to the given data, the cash flows from operating activities would be the following:

Sun Devil Company

Statement of cash flow(Partial)

For the year ended December 31,20x2

Operating Activities:

Net income  $155,000

Adjust to reconcile net income to

Net cash provided (used)by operating Activities:

Depreciation Expense  $30,000

Gain on sale of Equipment -$50000

Account Receivable Increase -$10000

Prepaid Expense Increase -$2000

Wages Payable Increase $1000

Account Payable Decrease -$20000

Total Adjust to reconcile net income to

Net cash provided (used)by operating Activities=  -$51000

Therefore, Net cash provided by operating Activities  $104,000