Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.)Acquired $6,000 cash from issuing common stock.Borrowed $4,400 from a bank.Earned $6,200 of revenues.Incurred $4,800 in expenses.Paid dividends of $800. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.)Acquired an additional $1,000 cash from the issue of common stock.Repaid $2,600 of its debt to the bank.Earned revenues, $9,000.Incurred expenses of $5,500.Paid dividends of $1,280.
What was the net cash flow from financing activities reported on Lexington's statement of cash flows for Year 2?
A)$2,880 outflow
B)$2,880 inflow
C)$1,000 outflow
D)$1,000 inflow

Question

Quizplus · Accepted Answer

In Year 2, the net cash flow from financing activities includes $1,000 inflow from issuing common stock and $2,600 outflow for repaying debt, resulting in a net outflow of $1,600. Additionally, $1,280 was paid as dividends, making the total net cash outflow $2,880.

Lexington Company Engaged in the Following Transactions During Year 1