Darnell,Inc.'s balance sheet indicated that the cash account increased by $5,400 during the past year.Net cash provided by operating activities was $14,000 and net cash used in investing activities was $6,100.What was the net cash flow effect of the company's financing activities?
A) Net cash provided of $2,500
B) Net cash used of $2,500
C) Net cash used of $14,700
D) Net cash provided of $14,700

Question

Quizplus · Accepted Answer

To find the net cash flow effect of financing activities, we need to use the following formula: 
Net cash flow from operating activities + net cash flow from investing activities + net cash flow from financing activities = change in cash 
Plugging in the given values, we get: 
$14,000 (net cash provided by operating activities) - $6,100 (net cash used in investing activities) + net cash flow from financing activities = $5,400 (increase in cash) 
Solving for net cash flow from financing activities, we get: 
Net cash flow from financing activities = $2,500 net cash used.