Firm D cash sales for the month are $100,000 and its accounts receivab

Firm D cash sales for the month are $100,000 and its accounts receivable payments for the month are $100,000.

What is its total incoming cash flow for the month if its beginning cash for the month is $50,000, its wages and salaries for the month are $50,000 and there are no other cash inflows for the month?
A) $150,000
B) $200,000
C) $250,000
D) Cannot tell because we do not know the beginning cash for the month.

ANSWER

Answer: B
Explanation: B) The total incoming cash flow for the month = cash sales for the month + accounts receivable payments for the month (which are inflows from prior months’ sales) = $100,000 + $100,000 = $200,000. Wages and salaries are outgoing cash flows.