During 2015, Stout Inc. had the following activities related to its financial operations: The amount of net cash used in financing activities to appear in Stout's statement of cash flows for 2015 should be
A) $1,990,000.
B) $2,176,000.
C) $2,536,000.
D) $2,548,000.

Question

During 2015, Stout Inc. had the following activities related to its financial operations:  The amount of net cash used in financing activities to appear in Stout's statement of cash flows for 2015 should be
A) $1,990,000. 
B) $2,176,000. 
C) $2,536,000. 
D) $2,548,000.

Quizplus · Accepted Answer

The net cash used in financing activities is the sum of the cash outflows from financing activities and the sum of the cash inflows from financing activities.

Cash outflows from financing activities: 
- Dividends paid = $680,000 
- Repurchase of common stock = $1,906,000 
- Payment of long-term debt = $6,000 
Total cash outflows from financing activities = $2,592,000

Cash inflows from financing activities: 
- Issuance of common stock = $46,000 
- Issuance of long-term debt = $10,000 
Total cash inflows from financing activities = $56,000

Net cash used in financing activities = Total cash outflows - Total cash inflows 
Net cash used in financing activities = $2,536,000 (Option C)