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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Swasey Company earned net income of $1,800,000 in 20X2. Swasey provided the following information:

Chapter 14, Problem 21BEA, Swasey Company earned net income of 1,800,000 in 20X2. Swasey provided the following information:

Required:

Compute the financing cash flows for the current year.

To determine

Calculate the financing cash flows for the current year.

Explanation

Cash Flows from Financing Activities:

This category of a cash flow statement includes those activities which help a company to raise cash from creditors and owners. Financing activities basically show those activities that are required to fund a company.

The calculation of financing cash flows for the current year is shown in table below:

S Company
Cash Flow Statement
Financing Cash Flows:
ParticularsAmount ($)
Issuance of bonds payable770,000
Payment of mortgage(200,000)
Payment of dividends1(800,000)
        Net cash from financing activities(230,000)

Table (1)

Therefore, net cash flow from financing activities is $(230,000).

Working Note:

1...

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