Question

Using the information below, calculate net cash flows from financing activities. Net income $ 120,000 Receive cash from issuing stock 80,000 Pay cash for equipment 90,000 Increase in accounts receivable 10,000 Depreciation expense $ 30,000 Increase in accounts payable 5,000 Receive cash from sale of land 75,000 Pay cash dividends 20,000 Multiple Choice $60,000. $80,000. $100,000.

Answer 1

The net cash flows from financing activities is $60,000.

Step-by-step explanation:

XYZ Company

Statement of cash flows (extract)

Proceed from issue of stock $80,000

Cash dividends paid (20,000)

Net cash flows from financing activities $60,000

Every other item left out either affects net cash flows from operating activities or investing activities. For example, the below affect net cash flows from investing activities:

Purchase of equipment (90,000)

Proceed from sale of land 75,000