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9 June, 12:02

At the beginning of the year, Gonzales Corporation had $100,000 in cash. During the year, the company undertook a major expansion. From the statement of cash flows, operating activities generated $300,000 of cash, while investing activities required cash expenditures of $800,000. At the end of the year, the company's cash position was $50,000. What was the net cash provided by the company's financing activities?

a.$350,000

b.$400,000

c.$300,000

d.$450,000

e.$500,000

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Answers (1)
  1. 9 June, 12:20
    0
    The correct answer is option (D).

    Explanation:

    According to the scenario, the given data are as follows:

    Beginning cash flow = $100,000

    Operating activities generated = $300,000

    Investing activities required = $800,000

    End Cash = $50,000

    So, we can calculate the net cash provided by company's financing activities by using following formula:

    So, first we analyze Cash flow after operating activities, then

    Cash flow (after operating activities) = Beginning cash flow + Operating activities generated

    = $100,000 + $300,000

    = $400,000

    Now, cash flow after investing = $400,000 - $800,000

    = - $400,000

    Given that closing cash balance = $50,000

    So, Net cash provided = $400,000 + $50,000

    = $450,000

    Hence, the net cash provided by the company's financing activities was $450,000.
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