Jarvis, Inc. reported net income of $34,000 for the year ended December 31, 2011

Question

Jarvis, Inc. reported net income of $34,000 for the year ended December 31, 2011. Included in net income was a gain on early extinguishment of debt of $60,000 related to bonds payable with a book value of $1,200,000. Each of the following accounts increased during 2011:

Notes receivable $45,000
Deferred tax liability $10,000
Treasury stock $90,000


What is the amount of cash used by financing activities for Jarvis, Inc. for the year ended December 31, 2011?


$1,240,000


$195,000


$160,000


$1,230,000

Explanation / Answer

Jarvis, Inc. reported net income of $34,000 for the year ended December 31, 2011. Included in net income was a gain on early extinguishment of debt of $60,000 related to bonds payable with a book value of $1,200,000. Each of the following accounts increased during 2011:

Notes receivable $45,000
Deferred tax liability $10,000
Treasury stock $90,000


What is the amount of cash used by financing activities for Jarvis, Inc. for the year ended December 31, 2011?


$1,240,000


$195,000


$160,000


$1,230,000

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