A company reported the following information for a financial year: $\begin{array}{lr}
\text { Profit from ordinary activities before incometax expense } & 264000 \
\text { Income tax expense } & 70000 \
\text { Depreciation expense } & 24000 \
\text { Issue of shares } & 120000 \
\text { Loan made to another company } & 24000 \
\text { Increase in accounts receivable } & 8000 \
\text { Decrease in inventories } & 12000 \
\text { Cash received from loans receivable } & 4000 \
\text { Dividends paid } & 16000
\end{array}$ What is the net cash inflow (outflow) from financing activities?
A) $104 000 net cash inflow.
B) $120 000 net cash inflow.
C) $124 000 net cash inflow.
D) $(16 000) net cash outflow.

Question

Quizplus · Accepted Answer

Financing activities include the issue of shares and dividends paid. The net cash inflow from financing activities is calculated as the issue of shares ($120,000) minus dividends paid ($16,000), which equals $104,000 net cash inflow.

A Company Reported the Following Information for a Financial Year