In Ramon Company Treasury Stock increased $20000 from a cash purchase and Retained Earnings increased $80000 as a result of net income of $120000 and cash dividends paid of $40000. Net cash used by financing activities is:

Question

Quizplus · Accepted Answer

The increase in Treasury Stock is considered a financing activity because it represents the company buying back its own stock. Therefore, the $20,000 increase in Treasury Stock is subtracted from the retained earnings increase of $80,000, resulting in a net increase of $60,000 in financing activities. Since there were no other financing activities mentioned in the question, the answer is $60,000. Therefore, the correct choice is D.

In Ramon Company Treasury Stock Increased $20000 from a Cash