Question

Flounder Corporation engaged in the following cash transactions during 2020. Sale of land and building $182,330 Purchase of treasury stock 41,100 Purchase of land 41,800 Payment of cash dividend 94,300 Purchase of equipment 53,500 Issuance of common stock 148,900 Retirement of bonds 107,800Compute the net cash used (provided) by financing activities. (Show amounts that decrease cash flow with either a - s Flounder Corporation

Answer 1

Answer:

-$94,300

Explanation:

Activities related to land, buildings or equipment do not qualify as financing activities and thus should not be considered. As for the remaining activities, their contributions to cash are listed as follows:

Purchase of treasury stock = -$41,100

Payment of cash dividend = -$94,300

Issuance of common stock = $148,900

Retirement of bonds = -$107,800

The cash flow due to financing activities is:

$CF = \ 148,900 -\ 107,800-\ 94,300-\ 41,100 \\CF=-\ 94,300$

Net cash used by financing activities is -$94,300.