During 2018,Victory Solutions had the following cash flows: (1)received cash of $5,000 billed to a customer in 2017; (2)earned $20,000 of net income; (3)paid interest of $6,000 on a corporate bond issued; (4)paid dividends of $8,000 to its stockholders; (5)borrowed $40,000 from a local bank;and (6)purchased its own shares of common stock for $10,000.What is Victory Solution's net cash flows from financing activities for 2018?

Question

Quizplus · Accepted Answer

Net cash flows from financing activities is calculated by adding the cash inflows from financing activities (such as borrowing) and subtracting the cash outflows from financing activities (such as paying dividends and buying back shares). 
In this case, the cash inflows from financing activities is $40,000 (borrowed from a local bank) and the cash outflows from financing activities is $18,000 ($8,000 for dividends and $10,000 for buying back shares). 
Thus, the net cash flows from financing activities is $40,000 - $18,000 = $22,000.

During 2018,Victory Solutions Had the Following Cash Flows: (1)received Cash