Weston is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from financing activities:
A) $(168,000).
B) $200,000.
C) $168,000.
D) $(191,700).
E) $191,700.

Question

Weston is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from financing activities: 
A) $(168,000). 
B) $200,000. 
C) $168,000. 
D) $(191,700). 
E) $191,700.

Quizplus · Accepted Answer

To determine the cash flows from financing activities, we need to look at the changes in long-term liabilities and equity accounts. In this case, we can see that the long-term debt decreased by $600,000 ($3,000,000 - $2,400,000) and common stock increased by $432,000 ($2,052,000 - $1,620,000). Using the formula for cash flows from financing activities (decrease in liabilities + increase in equity), we get $168,000 ($600,000 - $432,000) as the amount of cash flows from financing activities. The correct answer is C.

Weston Is Preparing the Company's Statement of Cash Flows for the Fiscal