During Year 5, Stout Inc. made a cash payment of $186,000 on dividends declared in Year 4 and paid $2,650,000 to retire $2,620,000 of long-term bonds payable early. The company also sold treasury stock purchased for $258,000 for $300,000 and had $360,000 of preferred stock converted into shares of common stock. Based on this information, what was Stout's net cash flows from financing activities for Year 5? a. $2,548,0 b. $2,536,0 c. $1,990,0 d. $2,176,0

Question

Fisher Sanford

Business

14 March, 09:39

During Year 5, Stout Inc. made a cash payment of $186,000 on dividends declared in Year 4 and paid $2,650,000 to retire $2,620,000 of long-term bonds payable early. The company also sold treasury stock purchased for $258,000 for $300,000 and had $360,000 of preferred stock converted into shares of common stock. Based on this information, what was Stout's net cash flows from financing activities for Year 5? a. $2,548,0 b. $2,536,0 c. $1,990,0 d. $2,176,0

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Answers (1)

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Jasmin Mann · Answer 1

b. $2,536,000

Explanation:

The computation of the net cash flows from financing activities is presented below:

Cash flows from financing activities

Cash payment on dividend declared - $186,000

Sale value of treasury stock $300,000

Cash paid to retire of long term bond - $2,650,000

Net cash flows used by financing activities - $2,536,000

The cash outflow is in negative sign whereas the cash inflow is in positive sign