A company had the following cash flows for the year:
(a)Purchased land,$60,000
(b)Borrowed from a local bank,$100,000
(c)Paid employee salaries,$50,000
(d)Issued common stock,$75,000
(e)Paid dividends,$20,000
(f)Sold equipment,$40,000
(g)Sold services to customers,$120,000
What amount would be reported for net financing cash flows on the Statement of Cash Flows?
A)$155,000.
B)$70,000.
C)($20,000).

Question

A company had the following cash flows for the year: 
(a)Purchased land,$60,000
(b)Borrowed from a local bank,$100,000
(c)Paid employee salaries,$50,000
(d)Issued common stock,$75,000
(e)Paid dividends,$20,000
(f)Sold equipment,$40,000
(g)Sold services to customers,$120,000
What amount would be reported for net financing cash flows on the Statement of Cash Flows?
A)$155,000.
B)$70,000.
C)($20,000).

Quizplus · Accepted Answer

Net financing cash flows include cash transactions related to borrowing, repaying debt, issuing stock, and paying dividends. Here, borrowing from a local bank ($100,000) and issuing common stock ($75,000) are inflows, while paying dividends ($20,000) is an outflow. Thus, net financing cash flows = $100,000 + $75,000 - $20,000 = $155,000.

A Company Had the Following Cash Flows for the Year