$10,000 collections less $4,000 wages is $6,000 operating; the equipment purchase is negative $7,000; $5,000 owner investment less $2,000 principal repayment is $3,000 financing.
Moving the $4,000 wage payment to investing preserves the $2,000 total change but misclassifies an operating payment.
Financing must include the $2,000 cash principal repayment as an outflow rather than omitting it.
A cash payment to acquire equipment is a negative investing flow, not a positive source of Cash.
Answer: A
The three section subtotals are $6,000 operating, negative $7,000 investing, and $3,000 financing. Their sum is a $2,000 net increase. Beginning Cash of $12,000 plus $2,000 equals $14,000 ending Cash. Choice A is correct. The tie verifies the signed rollforward but each line still requires classification evidence.