Perez Company is preparing its cash flow statement using the indirect method.Refer to the following information:
1) Repayments on long-term bills payable $59,000
2) New borrowing on long-term bills payable $19,000

Which of the following statements is accurate regarding the cash flow statement?

Question

Perez Company is preparing its cash flow statement using the indirect method.Refer to the following information:
1) Repayments on long-term bills payable $59,000
2) New borrowing on long-term bills payable $19,000

Which of the following statements is accurate regarding the cash flow statement?

Quizplus · Accepted Answer

Repayments on long-term bills payable represent a cash outflow from financing activities, and new borrowing on long-term bills payable represents a cash inflow from financing activities. Therefore, the net cash used for financing activities will amount to repayments minus borrowing, or $59,000 - $19,000 = $40,000. Net cash used for investing activities is not affected by this information, so A and D are incorrect. Net cash provided by financing activities cannot be positive in this case, so C is incorrect.

Perez Company Is Preparing Its Cash Flow Statement Using the Indirect