Question

Keyser Beverage Company reported the following items in the most recent year. Net Income: $40,000 Dividends Paid: $5,000 Increase in Accounts Receivable: $10,000 Increase in Accounts Payable: $7,000 Purchase of Equipment: $8,000 Depreciation Expense: $4,000 Issue of Notes Payable: $20,000 Compute net cash from financing activities?

Answer 1

Keyser Beverage Company's net cash from financing activities is calculated by subtracting the dividends paid from the issue of notes payable, resulting in $15,000.

Step-by-step explanation:

The student is asking for the computation of net cash from financing activities for Keyser Beverage Company. To calculate this, we need to consider the cash flows related to financing activities, which typically include dividends paid, new loans or notes payable, and repayments of existing debts. In this scenario, the company reported the following items:

• Dividends Paid: $5,000
• Issue of Notes Payable: $20,000

Net cash from financing activities is the sum of cash inflows from issuing notes payable less the outflows used to pay dividends. This is calculated as follows:

Net Cash from Financing Activities = Issue of Notes Payable - Dividends Paid

Net Cash from Financing Activities = $20,000 - $5,000

Net Cash from Financing Activities = $15,000

Therefore, Keyser Beverage Company's net cash from financing activities is $15,000.