Question

In preparing a company's statement of cash flows for the most recent year, Ransom Corp. reported the following information:
Repayment of outstanding bonds $107,000
Purchase of treasury stock 62,000
Issuance of common stock 46,000
Payment of cash dividends 15,000
Net cash flows from financing activities for the year were:______.
a. $230,000 of net cash used.
b. $230,000 of net cash provided.
c. $108,000 of net cash used.
d. $138,000 of net cash used.
e. $138,000 of net cash provided.

Answer 1

Answer: d. $138,000 of net cash used.

Explanation:

Financing activities in the Cashflow statement have to do with Equity and Debt so the net cash from financing will be;

= Issuance of common stock - Payment of cash dividend - purchase of treasury stock - repayment of outstanding bonds

= 46,000 - 15,000 - 62,000 - 107,000

= -$138,000

There was a Net cash outflow of $138,000 which means $138,000 of cash was used.