PipCo financial statements included the following amounts for the current year: $$\begin{array} { | l | r | }
\hline \text { Retired preferred stock } & \$ 60,000 \
\hline \text { Loaned cash to key supplier } & 17,000 \
\hline \text { Dividends paid } & 23,000 \
\hline \text { Sold used delivery truck } & 44,000 \
\hline \text { Issued new bonds } & 71,000 \
\hline
\end{array}$$
Based on this information, what is the amount of net cash flows from financing activities?
A) $88,000 net inflow
B) $12,000 net inflow
C) $12,000 net outflow
D) $11,000 net outflow

Question

PipCo financial statements included the following amounts for the current year: $$\begin{array} { | l | r | } 
\hline \text { Retired preferred stock } & \$ 60,000 \
\hline \text { Loaned cash to key supplier } & 17,000 \
\hline \text { Dividends paid } & 23,000 \
\hline \text { Sold used delivery truck } & 44,000 \
\hline \text { Issued new bonds } & 71,000 \
\hline
\end{array}$$ 
Based on this information, what is the amount of net cash flows from financing activities?
A) $88,000 net inflow
B) $12,000 net inflow
C) $12,000 net outflow
D) $11,000 net outflow

Quizplus · Accepted Answer

Net cash flows from financing activities include cash inflows from issuing new bonds ($71,000) and cash outflows from retiring preferred stock ($60,000) and paying dividends ($23,000). The net cash flow is $71,000 - $60,000 - $23,000 = -$12,000, which is a net outflow.

PipCo Financial Statements Included the Following Amounts for the Current