Hip Dance Academy Ltd.’s year-end is February 28. The accounting records at March 31, 2020, include the selected accounts shown below.

Required

1. Compute Hip Dance Academy Ltd.’s net cash inflow or outflow from operating activities during the month ended March 31, 2020. Use the indirect method.

2. Does the business have trouble collecting receivables or selling inventory? How can you tell?

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Cash Accounts Receivable Mar. 1 75,000 Dividend 24,000 Mar. 1 54,000 Collections 126,000 Payments 138,000 Sales 228,000 Collections 126,000 Mar. 31 39,000 Mar. 31 156,000 Shoe Inventory Music Equipment Mar. 1 57,000 Mar. 1 279,000 Purchases 111,000 Cost of sales 108,000 Mar. 31 279,000 Mar. 31 60,000 Accumulated Amortization-Music Equipment Accounts Payable Mar. 1 78,000 Mar. 1 42,000 Amortization 9,000 Payments 96,000 Purchases 111,000 Mar. 31 87,000 Mar. 31 57,000 Accrued Liabilities Retained Earnings Mar. 1 27,000 Mar. 1 192,000 Quarterly dividend Payments 42,000 Expenses 33,000 24,000 Net income 69,000 Mar. 31 18,000 Mar. 31 237,000