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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Determining Net Cash Flow from Financing Activities

Madison Company reported the following information:

12/31/2019

12/31/2018

Notes payable

$95,000

$75,000

Common stock

120,000

80,000

Retained earnings

20,000

36,000

Madison reported net income of $26,000 for the year ended December 31, 2019. In addition, Madison repaid $35,000 of the notes payable during 2019.

Required:

Compute net cash flow from financing activities.

To determine

Introduction:

Cash Flow from Financing Activities represents inflows and outflows of cash coming about because of obligation issuance and financing, the issuance of any new stock, profit installments, and any repurchase of existing stock.

To choose:

Compute net cash flow from financing activities.

Explanation
Particular Amount ($)
Paid dividend
Issue Note payable
Repaid the note payable
Issue of common stock
Cash from financial activity
(20,000)
55,000
(35,000)
40,000
40,000

Retained Earning

...
Particular Amounts ($) Particular Amounts ($)

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