Question

Additional short-term borrowings $ 20,000

Purchase of short-term investments 5,000
Cash dividends paid 16,000
Interest paid 8,000
Compute cash flows from financing activities using the above company information. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Cash flow from from financing activities = $(4,000)

Step-by-step explanation:

The cash flow from financing activities includes that entails any or a combination of the following; issuance and redemption of stocks , issuance and redemption of debts and payment of interest and/or dividend, and receipt of dividend and or interest.

Kindly note that the purchase of short term investment is not a financing activity but rather an investing activity

Cash flow $

Short term borrowing 20,000

Cash dividend paid (16,000)

Interest paid (8,000)

Total Cash flow (4000)

Cash flow from from financing activities = $(4,000)