Company X paid Company Y $1.35 million for a new plant.During the same accounting period,Company X experienced the following changes in its balance sheet: Cash decreased by $350,000,Accounts Receivable increased by $321,300,Inventory increased by $275,800,Property,Plant,and Equipment increased by $752,900,and Bonds Payable increased by $1 million.The net cash flow provided by financing activities is:
A)An inflow of $1.35 million.
B)An outflow of $350,000.
C)An inflow of $1 million.
D)An inflow of $752,900.

Question

Quizplus · Accepted Answer

The only cash flow from financing activities is the inflow of $1 million from the issuance of bonds.Transactions involving plant,property and equipment are investing activities and changes in current assets are used to determine cash flows from operating activities.

Company X Paid Company Y $1