Question

Terp Corp.'s transactions for the year ended December 31, 2021 included the following: Purchased real estate for $1,250,000 cash which was borrowed from a bank. Sold investment securities for $1,000,000. Paid dividends of $1,200,000. Issued 500 shares of common stock for $500,000. Purchased machinery and equipment for $250,000 cash. Paid $900,000 toward a bank loan. Reduced accounts receivable by $200,000. Increased accounts payable $400,000. The net cash used in financing activities for 2021 was

Answer 1

Answer:

$1,600,000

Explanation:

Cashflow from financing activities

Dividends                                 ($1,200,000)

Issue of Stocks                            $500,000

Bank Loan Repayment             ($900,000)

Net Cash flow                          ($1,600,000)

thus

The net cash used in financing activities for 2021 was $1,600,000