Question

1. Net income was $470,000.
2. Issued common stock for $71,000 cash.
3. Paid cash dividend of $11,000.
4. Paid $115,000 cash to settle a note payable at its $115,000 maturity value.
5. Paid $118,000 cash to acquire its treasury stock.
6. Purchased equipment for $92,000 cash.

Use the above information to determine cash flows from financing activities. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Statement of Cash Flows from Financing Activities
	Amount in $	Amount in $
Cash flows from Financing activities
Issue of Common Stock	$              71,000
Paid cash for settlement of note payable	$         -1,15,000
Paid cash Dividends	$             -11,000
Purchase of Treasury Stock	$         -1,18,000
Net cash used in financing activities		$     -1,73,000
Net increase in cash and cash equivalents		$     -1,73,000
Note: Purchase of Equipment of $ 92,000 is part of cash flow from investing activities