Question

Lexington Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)
1) Acquired $4,500 cash from issuing common stock.
2) Borrowed $2,950 from a bank.
3) Earned $3,850 of revenues.
4) Incurred $2,550 in expenses.
5) Paid dividends of $550. Lexington Company engaged in the following transactions during Year
2:
1) Acquired an additional $1,250 cash from the issue of common stock.
2) Repaid $1,825 of its debt to the bank.
3) Earned revenues, $5,250.
4) Incurred expenses of $3,050.
5) Paid dividends of $1,540. The net cash flow from financing activities on Lexington's Year 2 statement of cash flows was

Answer 1

Answer:

$2,115

Explanation:

Lexington Company's Year 2 net cash flow from financing activities = cash received from issuing stocks minus bank loan payments - distributed dividends

net cash flow from financing activities = $1,250 (from additional stock) - $1,825 (bank payments) - $1,540 (dividends paid) = $2,115