During Year 1, Mallard Company earned $165,000 of sales revenue on account and accrued $122,500 of operating expenses. The company also earned $26,400 of service revenue that had previously been recorded as unearned revenue. In addition, a $2,200 stock dividend was issued to the stockholders. What can be said about cash flows considering these transactions?
A. There are no cash inflows or outflows as a result of these activities.
B. Cash inflows from operating activities are $42,500.
C. Cash inflows from operating activities are $68,900.
D. Cash outflows from financing activities are $2,200.
Answer: A
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