Question

Haskell company sold equipment for $500,000, purchased a building for $13,000,000, sold short-term investments for $560,000, repaid principal on a note payable for $4,600,000 plus $460,000 of interest, and paid cash dividends of $40,000. what was the net cash flow from financing activities? multiple choice

O $5,100,000 outflow.
O $4,640,000 outflow.
O $5,060,000 outflow.
O $4,600,000 outflow.

Answer 1

The net cash flow from financing activities for Haskell Company is a $4,640,000 outflow, calculated by adding the repayment of note payable ($4,600,000) and the cash dividends paid ($40,000).

option b is the correct

Step-by-step explanation:

The question is asking us to determine the net cash flow from financing activities for Haskell Company, given a series of transactions. The relevant transactions that affect the financing activities are:

• Sale of short-term investments: This is an investing activity, not financing.
• Repayment of the principal on a note payable: This is a financing activity and represents a cash outflow of $4,600,000.
• Payment of interest on the note payable: This is considered an operating activity, not financing.
• Paid cash dividends: This is indeed a financing activity and is a cash outflow of $40,000.

So, the net cash flow from financing activities is the sum of the principal repayment and the dividends paid, which is $4,600,000 + $40,000 = $4,640,000 outflow.