Question

Over the past year Company "X" experienced the following: raised $100,000 by issuing new common shares; had a net income of $210,000; bought $610,000 of new equipment; had depreciation of $60,000; reduced inventories by $900,000; borrowed $120,000 from the bank; sold old equipment for $750,000. For the year, Company "X" raised from Financing Activities the following amount of cash:

Answer 1

Company "X" raised a total of $220,000 from Financing Activities, which includes $100,000 from issuing new common shares and $120,000 from a bank loan.

Step-by-step explanation:

The question asks how much cash Company "X" raised from Financing Activities over the past year. To determine this, we identify the transactions related to financing activities. These include raising funds by issuing new common shares and borrowing from the bank. Therefore, Company "X" raised $100,000 through new common shares and borrowed $120,000 from the bank. Sales of old equipment, net income, and changes in inventory are not considered financing activities.

The total cash raised from financing activities would be the sum of cash from issuing new shares and the bank loan, which amounts to $220,000.