a. net income was $471,000.\nb. issued common stock for $79,000 cash.\nc. paid cash dividend of $14,000.\nd…
a. net income was $471,000.\nb. issued common stock for $79,000 cash.\nc. paid cash dividend of $14,000.\nd. paid $125,000 cash to settle a long - term notes payable at its $125,000 maturity value.\ne. paid $116,000 cash to acquire its treasury stock.\nf. purchased equipment for $91,000 cash.\nuse the above information to determine cash flows from financing activities.\nnote: amounts to be deducted should be indicated with a minus sign.\nstatement of cash flows (partial)\ncash flows from financing activities
Answer
Explanation:
Step1: Identify cash - inflows from financing activities
Issuing common stock is a financing activity that brings in cash. So, the cash inflow from issuing common stock is $79,000.
Step2: Identify cash - outflows from financing activities
Paying cash dividends, settling long - term notes payable, and purchasing treasury stock are financing activities that result in cash outflows. The cash outflow for dividends is $14,000, for settling notes payable is $125,000, and for treasury stock is $116,000.
Step3: Calculate net cash flows from financing activities
Net cash flows from financing activities = Cash inflows - Cash outflows. [=79000-(14000 + 125000+116000)] [=79000 - 255000] [=- 176000]
Answer:
| Cash flows from financing activities | Amount |
|---|---|
| Issuance of common stock | $79,000 |
| Payment of cash dividends | -$14,000 |
| Payment of long - term notes payable | -$125,000 |
| Purchase of treasury stock | -$116,000 |
| Net cash flows from financing activities | -$176,000 |