Smiley Corp.\'s transactions for the year ended December 31, 2018 included the f

Question

Smiley Corp.'s transactions for the year ended December 31, 2018 included the following:

Purchased real estate for $1,250,000 cash which was borrowed from a bank.

Sold available-for-sale securities for $1,000,000.

Paid dividends of $1,200,000.

Issued 500 shares of common stock for $500,000.

Purchased machinery and equipment for $250,000 cash.

Paid $900,000 toward a bank loan.

Reduced accounts receivable by $200,000.

Increased accounts payable $400,000.

Smiley's net cash used in financing activities for 2018 was

a.   $450,000.

b.   $350,000.

c.   $900,000.

d.   $850,000.

Show (or explain) your calculation

Explanation / Answer

Calculate cash used in financing activities :

So answer is b) $350000

Cash flow from financing activities Borrow from bank 1250000 Dividend paid -1200000 Issue common Stock 500000 Loan repaid -900000 Net cash used in cash flow from financing activities -350000

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