During the 2016 accounting period the 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?

There are no cash effects.

Cash inflows from operating activities are $42,500.

Cash inflows from operating activities are $68,900.

Cash outflows from financing activities are $2,200.