Question

Gyan Corp. transactions for the year ended 2019 included the following: [52] Sale of Gyan Corp.s common stock: 250,000 Proceeds from Sale of Land:: 162,000 Proceeds from Long-Term Borrowing:: 405,000 Plant Assets Purchased:: 149,000 Inventories Increase : 685,000 Sale of Peralta Inc.'s common stock:: 120,000 Dividends Paid: 51.000 Proceeds from sale of Treasury Notes:: 37,000 Gyan Corp.'s cash flow from financing for 2019 is [Enter only numbers and minus sign if needed; no commas or $signs or BracketsX should be entered.

Answer 1

Cash flow from financing activities involves cash inflow and outflow for the financial transactions i.e purchasing and selling of stocks or debts and involving dividend.financing activities involve increase of long term liabilities of the firm's as equity and debts are raised here.

Here proceeds from sale of land is investing activities, plant assets purchased is investing activities , inventories increase is operating activities being a current assets this will not be included in cash flow from financing activities. Further sale of peraltas common stock is sell of investment and not increased or decreased the equity and debts but the investment so it's an cash inflow from investing activities.

Further the transaction for which the cash inflow is there is added and involving cash payment is reduced.

Thus cash flow from financing activities = sale of Gyan corps common stock + proceeds from long term borrowing + proceeds from sale of treasury notes - Dividend paid.

Cash flow from financing activities = 250,000 + 405,000 + 37,000 - 51000

Cash flow from financing financing for 2019 is = 641000.

Feel free to comment doubts if any..