Question

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) Acquired $3,300 cash from issuing common stock. Borrowed $2,350 from a bank. Earned $3,250 of revenues. Incurred $2,430 in expenses. Paid dividends of $430. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.) Acquired an additional $650 cash from the issue of common stock. Repaid $1,405 of its debt to the bank. Earned revenues, $4,650. Incurred expenses of $2,810. Paid dividends of $820. What was the net cash flow from financing activities reported on Lexington's statement of cash flows for Year 2

Answer 1

Answer:

($1,575)

Explanation:

The computation of net cash flow from financing activities is shown below:-

Lexington Company

Net cash flow from financing activities

Particulars                                                   Amount

Cash received from common stock           $650

Less:Cash paid for repayment of loan        ($1,405)

Less: Cash paid for dividend                       ($820)

Net cashflow from financing activities     ($1,575)

So, to reach the net cashflow from financing activities we simply added the cash received from common stock and deduct the cash paid for repayment of loan and cash paid for dividend.