Use the following information for questions 83 and 84.
Napier Co. provided the following information on selected transactions during 2015: $$\begin{array} { l r }
\text { Purchase of land by issuing bonds } & \$ 500,000 \
\text { Proceeds from issuing bonds } & 1,500,000 \
\text { Purchases of inventory } & 1,900,000 \
\text { Purchases of treasury stock } & 300,000 \
\text { Loans made to affiliated corporations } & 700,000 \
\text { Dividends paid to preferred stockholders } & 200,000 \
\text { Proceeds from issuing preferred stock } & 800,000 \
\text { Proceeds from sale of equipment } & 150,000
\end{array}$$
-The net cash provided by financing activities during 2015 is
A) $1,600,000.
B) $1,800,000.
C) $2,100,000.
D) $2,300,000.

Question

Use the following information for questions 83 and 84.
Napier Co. provided the following information on selected transactions during 2015: $$\begin{array} { l r } 
\text { Purchase of land by issuing bonds } & \$ 500,000 \
\text { Proceeds from issuing bonds } & 1,500,000 \
\text { Purchases of inventory } & 1,900,000 \
\text { Purchases of treasury stock } & 300,000 \
\text { Loans made to affiliated corporations } & 700,000 \
\text { Dividends paid to preferred stockholders } & 200,000 \
\text { Proceeds from issuing preferred stock } & 800,000 \
\text { Proceeds from sale of equipment } & 150,000
\end{array}$$
-The net cash provided by financing activities during 2015 is
A) $1,600,000.
B) $1,800,000.
C) $2,100,000.
D) $2,300,000.

Quizplus · Accepted Answer

Financing activities include proceeds from issuing bonds and preferred stock, and dividends paid to preferred stockholders. Thus, the net cash provided by financing activities is calculated as follows: Proceeds from issuing bonds ($1,500,000) + Proceeds from issuing preferred stock ($800,000) - Dividends paid to preferred stockholders ($200,000) = $2,100,000. However, the purchase of treasury stock ($300,000) is also a financing activity and should be subtracted, resulting in $2,100,000 - $300,000 = $1,800,000.

Use the Following Information for Questions 83 and 84 -The Net Cash Provided by Financing Activities During 2015 Is