Thomas Electric's statement of cash flows indicates a $12,000 decrease in cash during the year.The statement also indicates that $28,000 was provided by operating activities and $15,000 was used by investing activities.How much is net cash provided/(used) by financing activities?

Question

Quizplus · Accepted Answer

Using the indirect method, the statement of cash flows can be broken down into three sections: Operating activities, investing activities, and financing activities.

Net cash provided by operating activities = $28,000

Net cash used by investing activities = $15,000

Change in cash = ($12,000)

Therefore, to balance the equation:

Net cash used by financing activities = ($28,000) - ($15,000) - ($12,000) = ($25,000)

Option A is the correct answer.

Thomas Electric's Statement of Cash Flows Indicates a $12,000 Decrease