Which of the following should be shown on a statement of cash flows under the financing activities section? a.the proceeds from
the sale of a building b.the purchase of a long-term investment in the common stock of another company c.the issuance of a long-term note to acquire land d.the payment of cash to retire a long-term note
Cash flow statement shows cash flows from operations, investment, and financing activities.
Financing activities are the various transactions a business undertakes that will affect long term liabilities and equity of a business. It is how a company funds it's operations and expansion externally.
Borrowing and repaying of long term loans is a financing activity. So payment of cash to retire a long-term note will appear in the cash flow statement under financing activity.
required = excess (deficiency) of cash available over disbursement.
To calculate the excess (deficiency) of cash available over disbursement, disbursements will be deducted from all the cash received and available, if the difference is positive, then the cash available is excess, if negative, then the cash available is deficiency. This is calculated as follows
Total cash available = beginning cash balance + budgeted cash receipt
= 29,000 + 187,000 = $216,000
Total disbursements = $186,000
∴Excess (deficiency) of cash available = 216,000 - 186,000 =$30,000 (excess)