Question

Selected information from the accounting records of Dunn's Auto Dealers is as follows: Cost of furniture purchased for cash $ 8,000 Proceeds from bank loan 100,000 Repayment of bank loan (includes interest of $4,000) 44,000 Proceeds from sale of equipment 5,000 Cash collected from customers 320,000 Purchase of stock of another corporation as an investment 20,000 Common stock issued for cash 200,000 In its statement of cash flows, Dunn's should report net cash inflows from financing activities of:

Answer 1

Answer:

$23,000

Explanation:

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

Net cash inflows from financing activities = Proceeds from the sale of equipment - Cost of furniture - Purchase of stock

= $5,000 - $8,000 - $20,000

= $23,000

Hence, for computing the net cash flow from financing activities we simply applied the above formula.