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5 September, 20:13

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) Acquired $3,300 cash from issuing common stock. Borrowed $2,350 from a bank. Earned $3,250 of revenues. Incurred $2,430 in expenses. Paid dividends of $430. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.) Acquired an additional $650 cash from the issue of common stock. Repaid $1,405 of its debt to the bank. Earned revenues, $4,650. Incurred expenses of $2,810. Paid dividends of $820. What was the net cash flow from financing activities reported on Lexington's statement of cash flows for Year 2

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Answers (1)
  1. 5 September, 20:36
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    ($1,575)

    Explanation:

    The computation of net cash flow from financing activities is shown below:-

    Lexington Company

    Net cash flow from financing activities

    Particulars Amount

    Cash received from common stock $650

    Less:Cash paid for repayment of loan ($1,405)

    Less: Cash paid for dividend ($820)

    Net cashflow from financing activities ($1,575)

    So, to reach the net cashflow from financing activities we simply added the cash received from common stock and deduct the cash paid for repayment of loan and cash paid for dividend.
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