During the year,the Abbot Company had the following changes in account balances:
1)The Accumulated Depreciation account had a beginning balance of $25,000 and an ending balance of $35,000.The increase was due to depreciation expense.
2)The long-term Notes Payable account had a beginning balance of $40,000 and an ending balance of $15,000.The decrease was due to repayment of debt.
3)The Accounts Receivable account had a beginning balance of $60,000 and an ending balance of $50,000.
4)The Equipment account had a beginning balance of $25,000 and an ending balance of $92,500.The increase was due to the purchase of equipment for cash.
5)The Long-Term Investments account (marketable securities)had a beginning balance of $18,000 and an ending balance of $12,500.The decrease was due to the sale of investments at cost.
6)The amount of cash dividends declared and paid during the year was $22,000.
7)The Interest Payable account had a beginning balance of $2,250 and an ending balance of $1,250.
What is the net cash flow from financing activities?
A)$22,000 inflow
B)$25,000 inflow
C)$25,000 outflow
D)$47,000 outflow

Question

Quizplus · Accepted Answer

Financing activities include transactions involving debt, equity, and dividends. Here, the repayment of debt ($40,000 - $15,000 = $25,000 outflow) and the payment of dividends ($22,000 outflow) are considered. Therefore, the net cash flow from financing activities is the sum of these outflows: $25,000 + $22,000 = $47,000 outflow.

During the Year,the Abbot Company Had the Following Changes in Account