Question

Oklahoma Corp. uses the indirect method to prepare its statement of cash flows. Refer to the following information for​ 2018:

1. ​ Long-Term Notes​ Payable, beginning​ balance, $84,000

2. ​ Long-Term Notes​ Payable, ending​ balance, $99,000

3. Common​ Stock, beginning​ balance, $3,400

4. Common​ Stock, ending​ balance, $26,000

5. Retained​ Earnings, beginning​ balance, $78,000

6. Retained​ Earnings, ending​ balance, $120,000

7. Treasury​ Stock, beginning​ balance, $5,800

8. Treasury​ Stock, ending​ balance, $10,600

9. No stock was retired.

10. No treasury stock was sold.

11. During​ 2018, the company repaid​ $35,000 of​ long-term notes payable.

12. During​ 2018, the company borrowed​ $27,000 on new​ long-term notes payable.

13. Net income for the year was​ $50,000.

14. Assume all dividends declared during the year were paid.

What is the net cash provided by financing​ activities?

A.​$17,800

B.​$9,800

C.​($8,000)

D.​$1,800

Answer 1

Calculation of Cash Flows From Financing Activities
Long term notes payable, increase	27,000
Repayment of long term note payable	-35,000
Purchase of treasury stock	-4,800
Cash dividend paid	-8,000
Issue of common stock	22,600
Net cash provided by financing​ activities	$1,800

Correct option is D.

Cash dividend paid = Retained earnings, beginning + Net income - Retained earnings, ending

= 78,000+50,000-120,000

= $8,000

Kindly comment if you need further assistance.

Thanks‼!