A company had cash flows during the year as follows: $50,000 received from short-term borrowing, $10,000 paid to purchase treasury stock, $15,000 paid to stockholders as dividends, and $15,000 to purchase plant assets. What is the amount of net cash flows from financing activities during the year

Question

Khalil

Business

16 September, 04:03

A company had cash flows during the year as follows: $50,000 received from short-term borrowing, $10,000 paid to purchase treasury stock, $15,000 paid to stockholders as dividends, and $15,000 to purchase plant assets. What is the amount of net cash flows from financing activities during the year

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Shiner · Answer 1

Net cash flow=$25000

Explanation:

The net cash flow from financing activities includes that entails any or a combination of the following; issuance and redemption of stocks, issuance and redemption of debts and payment of interest and/or dividend, and receipt of dividend and or interest.

The net cash flows = 50,000 - 10,000 - 15,000 = $25000

Kindly note that the purchase of plants assets is not a financing activity but investment