Question

Selected information from Vaughn Manufacturing's 2018 accounting records is as follows:

Proceeds from issuance of common stock: $803000
Proceeds from issuance of bonds: 2490000
Cash dividends on common stock paid: 283000
Cash dividends on preferred stock paid: 124000
Purchases of treasury stock: 233000

Sale of stock to officers and employees not included above 193000 Vaughn's statement of cash flows for the year ended December 31, 2018, would show net cash provided (used) by financing activities of :_______

a. $283000
b. $2846000
c. $124000
d. $(480000).

Answer 1

option B is correct,$2846000

Step-by-step explanation:

The cash provide by financing activities as at 31st December 2018 comprised of proceeds from stock issuance (both from stockholders as well as the officers and employees of the company),with the proceeds of cash received from issuance of bonds,less cash dividends to common stockholders and preferred ones and finally deducting the cash used in purchasing treasury stock

net cash flows provided by financing activities=$803,000+$2,490,000-$283,000-$124,000-$233,000+$193,000

=$2846000

The correct option is B as it reflects the exact amount of cash resources generated from providers of company finance