Question

Creative Sound Systems sold investments, land, and its own common stock for $35 million, $14.5 million, and $39.0 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $20.5 million, $24.5 million, and $11.5 million, respectively. What amount should Creative Sound Systems report as net cash flows from financing activities? (List cash outflows and any decrease in cash as negative amounts. Enter your answer in millions. (i.e., $10,000,000 should be entered as 10).)

Answer 1

Answer:

The correct answer is $18.5 million.

Explanation:

According to the scenario, the computation of the given data are as follows:

we can calculate the cash flow from financing activities by using following formula:

Cash flow from financing activities = Issue of common stock - Purchase of treasury stock

By putting the value, we get

Cash flow from financing activities = $39.0 million - $20.5 million

= $18.5 million