Question

The following transactions were made by Ruby Inc. last year:

Issuance of common stock $100,000
Dividends paid to the company's stockholders $2,000
Depreciation expense $6,000
Repayment of principal on bonds $40,000
Proceeds from the sale of the company's used equipment $39,000
Purchase of land $230,000
Based solely on the above information, net cash flow from financing activities for the year on the statement of cash flows would be:

a. $150,000 b. $67,000 c.$ 58,000 d. $29,000

Answer 1

OPtion (C) is correct.

Step-by-step explanation:

Given that,

Issuance of common stock = $100,000

Dividends paid to the company's stockholders = $2,000

Depreciation expense = $6,000

Repayment of principal on bonds = $40,000

Proceeds from the sale of the company's used equipment = $39,000

Purchase of land = $230,000

Cash flow from financing activities:

= Issuance of common stock - Dividends paid to the common stockholders - Repayment of principal on the company's own bonds

= $100,000 - $2,000 - $40,000

= $58,000

Therefore, the net cash inflow from financing activities is $58,000.