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 fell $350,000,accounts receivable rose $321,300,inventory rose $275,800,property,plant,and equipment rose $752,900,and bonds payable rose $1 million.The net cash flow from financing activities is:

Question

Quizplus · Accepted Answer

The net cash flow from financing activities is calculated by taking into account the changes in long-term liabilities (such as bonds payable) and equity. In this case, bonds payable increased by $1 million, indicating that the company received new financing. Therefore, the net cash flow from financing activities is an inflow of $1 million. The other changes in the balance sheet (cash, accounts receivable, inventory, and property, plant, and equipment) are related to operating and investing activities and do not impact the cash flow from financing activities.

Company X Paid Company Y $1