Question

Use the following information to determine this company's cash flows from financing activities.

a.Net income was $474,000.
b.Issued common stock for $71,000 cash.
c.Paid cash dividend of $16,000.
d.Paid $130,000 cash to settle a note payable at its $130,000 maturity value.
e.Paid $117,000 cash to acquire its treasury stock.
f.Purchased equipment for $86,000 cash.

Answer 1

Net cash provided by financing activities $334,000

Step-by-step explanation:

The question is to determine the cash flow from the organisation's financing activities as follows.

The statement of Cash flow of an organisation is divided into Cash flow from Operating, financing and Investing activities

A few of the items in the question will not reflect as follows:

1) The net income is part of the operating activities and will not be part of the financing activities

2) The purchase of equipment will be part of the investing activities not financing activities

Cash flows from Financing Activities

Description Amount ($)

Cash received from the common Stock 71,000

Payment of cash dividends 16,000

Payment to settle note payable 130,000

Payment to acquire treasury stock 117,000

Net cash provided by financing activities 334,000