37. The following transactions occurred last year at Jowlson Company: Issuance o

Question

37. The following transactions occurred last year at Jowlson Company:

Issuance of shares of the company's own common stock....$40,000

Dividends paid to the comapany's own shareholders....$3,000

Dividends recieved for investments in other companies shares......$5,000

Interest paid on the company's own bonds................$22,000

Repayment of principla on the companys own bonds..........$100,000

Proceeds from the sale of the companys used equipment...........$29,000

Purchase of Land.................$80,000
  

Based solely on the above information, the net cash provided by financing activities for the year on the statement of cash flows would be:
A. $(131,000)
B. $279,000
C. $(63,000)
D. $(85,000)

Explanation / Answer

Since you issued stock you are gaining 40,000 in cash

Since you paid dividends to shareholders you are losing (3,000)

You are receving dividends from other stocks so you gain $5,000

You are paying 22,000 on bonds that you have issued so you lose (22,000)

You are paying 100,000 on your bonds again so you lose (100,000)

Equipment and Land are not included in Financing Activities so we do not include these in this section of our cash flow statement .

$45,000-100,000-3,000-22,000=80,000

Answer D is correct

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