Crocker Inc. had the following activity during 20X7: $$\begin{array} { | l | r | }
\hline \text { Proceeds from sale of bonds payable } & \$ 200,000 \
\hline \text { Loss from disposal of equipment (Net book value } \$ 60,000 ) & \$ 38,000 \
\hline \text { Dividends paid to shareholders } & \$ 25,000 \
\hline \text { Sale of shares } & \$ 125,000 \
\hline \text { Gain on the sale of short term investments } & \$ 75,000 \
\hline
\end{array}$$ What is the cash flow from financing activities?
A) $300,000
B) $292,000
C) $325,000
D) $275,000

Question

Crocker Inc. had the following activity during 20X7: $$\begin{array} { | l | r | } 
\hline \text { Proceeds from sale of bonds payable } & \$ 200,000 \
\hline \text { Loss from disposal of equipment (Net book value } \$ 60,000 ) & \$ 38,000 \
\hline \text { Dividends paid to shareholders } & \$ 25,000 \
\hline \text { Sale of shares } & \$ 125,000 \
\hline \text { Gain on the sale of short term investments } & \$ 75,000 \
\hline
\end{array}$$ What is the cash flow from financing activities?
A) $300,000
B) $292,000
C) $325,000
D) $275,000

Quizplus · Accepted Answer

Financing activities include proceeds from the sale of bonds payable ($200,000) and sale of shares ($125,000), totaling $325,000. However, dividends paid to shareholders ($25,000) are also a financing activity but represent an outflow, so the net cash flow from financing activities is $300,000 ($325,000 - $25,000).

Crocker Inc What Is the Cash Flow from Financing Activities? A) $300,000

Crocker Inc What Is the Cash Flow from Financing Activities?
A) $300,000