A client's cash flow statement shows total income from employment of $72,000, investment income of $3,000, and rental income of $6,000. Their total expenses are $65,000, including $12,000 in income taxes. What is their net cash flow for the year?

Question: A client's cash flow statement shows total income from employment of $72,000, investment income of $3,000, and rental income of $6,000. Their total expenses are $65,000, including $12,000 in income taxes. What is their net cash flow for the year?

Answer options:

• $16,000 ✅ $26,000
• $10,000
• $20,000

Correct answer: $26,000

Explanation: Net cash flow is calculated as total income minus total expenses. Total income = $72,000 (employment) + $3,000 (investment) + $6,000 (rental) = $81,000. Net cash flow = $81,000 - $65,000 = $16,000. Wait, this was wrong calculation, income taxes are part of expenses. Net cash flow = $81,000 - $65,000 = $16,000.