Service Revenue for the year = $80,000. Of this amount, $70,000 is collected during the year and $10,000 is expected to be collected next year. Salaries Expense for the year = $40,000. Of this amount, $35,000 is paid during the year and $5,000 is expected to be paid next year. Advertising Expense for the year = $10,000. All of this amount is paid during the year. Supplies Expense for the year = $4,000. No supplies were purchased during the year. Utilities Expense for the year = $12,000. Of this amount, $11,000 is paid during the year and $1,000 is expected to be paid next year. Cash collected in advance from customers for services to be provided next year (Deferred Revenue) = $2,000. Required: Calculate operating cash flows. (List cash outflows as negative amounts.)

In the given information, it is not provided that cash is paid or not for Supplies, thus, assumed it was paid at the time of acquisition, and not in the current period when it is only charge to expense.

In that case, Cash generated from operating activities using direct method, shall be:

Cash flow from Operating Activities

Cash revenue collected = $70,000

Cash collected in advance = $2,000

Total cash inflow = $72,000

Cash paid for salaries = - $35,000

Cash paid for advertising expense = - $10,000

Cash paid for utilities = - $11,000

Total Cash outflow = - $56,000

Net Cash Inflow from Operating Activities = $16,000

dubeyshailja64 dubeyshailja64 · Answer 2 · 2022-02-24T11:50:21+01:00

The operating cash flows will be $16,000. The amount of operating cash flows are calculated using direct method. The calculations are given in the attachment.

What are Operating cash flows?

Operating cash flows are the cash flows of the enterprise generated by its day to day operations. It includes the amounts earned by a company's regular business.

The cash flow from operating activities if calculated using direct method, the cash inflows will be recorded when received and the outflows will be deducted when cash is actually paid.

Learn more about operating cash flows here:

https://brainly.com/question/15970690