In preparing a company\'s statement of cash flows for the most recent year, the
ID: 2585543 • Letter: I
Question
In preparing a company's statement of cash flows for the most recent year, the following information is available: loss on sale of equipment 35,461, purchase of machinery 113,252, proceeds from sale of equipment 123,326, repayment of outstanding bonds 87,593, purchase treasury stock 70,902, issue common stock 109,670, purchase land 43,761, increase in accounts receivable during the year 17,415, decrease in accounts payable for the year 50,701, payment of cash dividend 20,443. What is the net cash flows from financing activities for the year?
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Explanation / Answer
Loss on sale of equipment is shown as addition to Net income in operating activities section of statement of cash flows and not in the Financing activities section
Purchase of machinery is shown as cash outflow under investing activities section of statement of cash flows and not under financing activities section
Proceeds from sale of equipment is shown as an addition under investing activities section of statement of cash flows and not under financing activities section
Purchase of land is shown as cash outflow under investing activities section of statement of cash flows and not under financing activities section
Changes in working capital (increase in accounts receivable, decrease in accounts payable) is shown under operating activities section of statement of cash flows
Other items are shown under Financing Activities section of statement of cash flows as per following table
Cash flows from financing activities Particulars Amount $ Amount $ Issue of common stock 109,670 Less: Repayment of outstanding bonds (87,593) Purchase of treasury stock (70,902) Payment of cash dividend (20,443) (178,938) Net cash used in financing activities (69,268)