Question

Dristell Inc. had the following activities during the year (all transactions are for cash unless stated otherwise): 

a. A building with a book value of $400,000 was sold for $500 000 

b. Additional common stock was issued for $160 000 

c. Dristell purchased its own common stock as treasury stock at a cost of $75 000 

d. Land was acquired by issuing a 6% 10 year, $750 000 note payable to the seller. 

e. A dividend of $40.000 was paid to shareholders 

f. An investment in Fleet Corp.'s common stock was made for $120,000 

g. New equipment was purchased for $65.000 

h. A $90,000 note payable issued three years ago was paid in full 

I. A loan for $100,000 was made to one of Dristell's suppliers. The supplier plans to repay Oristell this amount plus 10% interest within 18 months 

Required: 

Calculate net cash flows from financing activities (Cash outflows should be indicated with a minus sign.) 

Answer 1

Net cash flows from Financing Activities = common stock issued 160,000 - Treasury stock purchased 75,000 - Dividends paid 40,000 - note payable 90,000 = 160,000 - 75,000 - 40, 000 - 90,000 = - 45,000 (minus sign here)

Answer 2

Solution:

Statement of Cash Flows (Partial)
Particulars	Details	Amount
Cash Flow from Financing Activities:
Proceed from issue of common stock	$160,000.00
Purchase of treasury stock	-$75,000.00
Cash paid for dividends	-$40,000.00
Repayment of note	-$90,000.00
Net Cash used in Financing activities		-$45,000.00