Stimpleton Company engages in the following cash payments:


Purchase equipment $4,000
Pay rent 700
Repay loan to the bank 5,900
Pay workers' salaries 1,050

What is the total amount of cash paid for operating activities?

A.$1,750
B.$4,000
C.$6,950
D.$9,900

Respuesta :

Answer: Option A

Explanation: Operating activities refers to those activities which are directly related to the core operations of the business. Such transactions are important for running the business and recorded at the top in cash flow statements.

Thus, only payment of rent and workers salary will be considered operating activities and the company will be having total of $1750 of cash outflow.

Hence the correct option is A.