Norris Company issued 10,000 shares of common stock for $250,000 and issued $220,000 in long-term notes payable during the year. It paid $24,000 in dividends. The net cash inflow from financing activities was $446,000, calculated as cash from stock + notes payable - dividends.
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1- Norris Company issued 10-000 shares of $1 par common stock for $25.docx
1. 1. Norris Company issued 10,000 shares of $1 par common stock for $25 per share during 2010.
The company paid dividends of $24,000 and issued long-term notes payable of $220,000 during
the year. What amount of cash flows from financing activities will be reported on the statement
of cash flows?
$6,000 net cash inflow.
$226,000 net cash inflow.
$470,000 net cash outflow.
$446,000 net cash inflow.
$6,000 net cash inflow.
$226,000 net cash inflow.
$470,000 net cash outflow.
$446,000 net cash inflow.
Solution
Hi,
Please find the detailed answer as follows:
Cash flows from financing activities = Cash Inflow from Issuance of Stock + Cash Inflow from
Issuance of Notes Payable - Cash Outflow from Payment of Dividends = 10000*25 + 220000 -
24000 = $446000
Option D ( $446,000 net cash inflow) is the correct answer.
Thanks.