Question

Use the following information to determine a company‘s cash flows from financing activities.a. Net income was 535.000.b. Issued common stock for $64,000 cash.c. Paid cash dividend of $14,600.d. Paid $50,000 cash to settle a bond payable at its 550,000 maturity value.e. Paid $12,000 cash to acquire its treasury stockf. Purchased equipment for $39,000 cash.

Answer 1

Answer:

The company‘s cash flows from financing activities is ($12,600), or cash deficit of $12,600

Explanation:

The cash flow from financing activities = Cash inflows from issuing equity or debt – dividend paid out – repurchasing equity or debt

= Issued common stock for $64,000 cash - Paid cash dividend of $14,600 - Paid $50,000 cash to settle a bond payable - Paid $12,000 cash to acquire its treasury stock

= $64,000 - $14,600 - $50,000 - $12,000 = ($12,600)