During the current year, a firm sells inventory on account for $1,000. The inventory (which was

purchased in a prior period) originally cost $700. An additional $50 was spent (in the current year)

sending the goods to a customer.

The firms net cash flows from these transactions would equate to:

1. a $1,000 increase in cash.
2. a $700 decrease in cash.

c. a $300 increase in cash.

d. a $50 decrease in cash.