Question

Creative Sound Systems sold investments, land, and its own common stock for $37.0 million, $14.3 million, and $38.6 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $20.3 million, $24.3 million, and $11.3 million, respectively. What amount should Creative Sound Systems report as net cash flows from financing activities? (List cash outflows and any decrease in cash as negative amounts. Round your answers to 1 decimal place. Enter your answers in millions (i.e., $10,100,000 should be entered as 10.1).)

Answer 1

$18.3 million

Step-by-step explanation:

Financing activities: It includes those activities which comes under the long term liabilities and shareholder equity balance. The issue of shares is an inflow of cash whereas redemption, dividend, and the purchase of treasury stock is an outflow of cash.

The computation of the amount reported as a net cash flows from financing activities is shown below:

Cash flow from Financing activities

Issuance of common stock $38.6 million

Less: Purchase of treasury stock -$20.3 million

Net Cash flow from Financing activities $18.3 million