McLaughlin Company issued common stock for proceeds of $372,000 during 2014. The company paid dividends of $66,000 and issued a long-term note payable for $250,000 in exchange for equipment during the year. The company also purchased treasury stock that had a cost of $54,000. The financing section of the statement of cash flows will report net cash inflows of
A) $252,000.
B) $556,000.
C) $306,000.
D) $502,000.

Question

Quizplus · Accepted Answer

The net cash inflows from financing activities are calculated as proceeds from issuing common stock ($372,000) minus dividends paid ($66,000) minus the purchase of treasury stock ($54,000), resulting in $252,000. The issuance of a long-term note payable for equipment is a non-cash transaction and does not affect the cash flow statement.

McLaughlin Company Issued Common Stock for Proceeds of $372,000 During