APS Company issued 15,000 shares of $1 par common stock for $40 per share during 2014. The company paid dividends of $36,000 and issued long-term notes payable of $330,000 during the year. What amount of cash flows from financing activities will be reported on the statement of cash flows?
A) $9,000 net cash inflow.
B) $264,000 net cash inflow.
C) $705,000 net cash outflow.
D) $894,000 net cash inflow.

Question

Quizplus · Accepted Answer

The cash inflow from issuing shares is 15,000 shares * $40 = $600,000. The cash inflow from issuing long-term notes payable is $330,000. The cash outflow for dividends is $36,000. Therefore, the net cash inflow from financing activities is $600,000 + $330,000 - $36,000 = $894,000.

APS Company Issued 15,000 Shares of $1 Par Common Stock