Question

In preparing its cash flow statement for the year ended December 31, 2020, Green Co. gathered the following data: Gain on sale of land $12,000 Proceeds from sale of land 20,000 Purchase of Black, Inc., bonds (face value $200,000) 360,000 Amortization of bond discount 4,000 Cash dividends declared 90,000 Cash dividends paid 76,000 Proceeds from sales of Green Co. common stock 150,000 In its December 31, 2020, statement of cash flows, what amount should Green report as net cash from financing activities?a.$40,000.
b.$54,000.
c.$60,000.
d.$74,000.

Answer 1

Answer:

Option (d) is correct.

Explanation:

Given that,

Gain on sale of land = $12,000

Proceeds from sale of land = 20,000

Purchase of Black, Inc., bonds (face value $200,000) = 360,000

Amortization of bond discount = 4,000

Cash dividends declared = 90,000

Cash dividends paid = 76,000

Proceeds from sales of Green Co. common stock = 150,000

Net cash from financing activities:

= Cash dividends paid + Proceeds from sales of Green Co. common stock

= ($76,000) + $150,000

= $74,000

Note that:

Only, issue of common stock and payment of cash dividends are financing activities.

All other information shall not be used in determining cash flows from financing activities.