Question

Uing the direct method, and the information in the exhibits, prepare the financing activities section of the statement of cash flows for Alaskan Travels, Inc., as of December 31, Year 2. In the first column, from the option list provided, select the description for cash flows that are clearly from financing activities. In the second column, enter the amounts that will be reported in the financing activities section of the statement of cash flows. Indicate negative numbers by using a leading minus (-) sign.
Cash flows from financing activities: Net cash provided by (used in) financing activities:

1.
2.
3.
4.
5.
Total:

Answer 1

Answer:

1. Dividends Paid - $8,900

2. Short term borrowing $5,500

3. Interest Paid - $1,208

4. Increase in Share capital $10,000

5. Long term borrowings Repayment - $7,250

Explanation:

Cash flows statements are important for a business as this clears out company position in terms of cash. The cash inflows and outflows are reported in the statement. There are three different categories in which cash is reported, Operating activities, Investing Activities and Financing Activities.

Financing activities shows cash flows which are used to fund the business. This part of cash flow shows the net cash generated from different sources of finance.