Question

McCorey Corporation recorded the following events last year: Repurchase by the company of its own common stock$30,000 Sale of long-term investment$49,000 Interest paid to lenders$10,000 Dividends paid to the company's shareholders$59,000 Collection by McCorey of a loan made to another company$35,000 Payment of taxes to governmental bodies$20,000 On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities. Based solely on the information above, the net cash provided by (used in) financing activities on the statement of cash flows would be:

Answer 1

Answer:

($89,000)

Explanation:

The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.

The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.  

The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.

the net cash provided by (used in) financing activities on the statement of cash flows would be:

= -$30,000 - $59,000

= - $89,000

Others not involved in the computation are investing and operating activities