The cash flow from financing in 2014 was $______. USE THE FINANCIAL DATA BELOW T

Question

The cash flow from financing in 2014 was $______.

USE THE FINANCIAL DATA BELOW TO ANSWER QUESTIONS 2-8 2014 2013 16,200 48,60044,500 24,30016,200 81,00098,000 64,80081,000 56,70064,800 Category Accounts payable Accounts receivable Accruals Cash Common Stock COGS 0 4,050 Depreciation expense Gross fixed assets Interest expense 121,500145,800 8,100 40,50060,800 81,00089,100 101,500121,500 44,80037,200 Operating expenses (excl. depr.) 12,10016,200 40,50060,800 105,300121,500 6,480 6,400 Inventories Long-term debt Net fixed assets Notes payable Retained earnings Sales Taxes 4,860

Explanation / Answer

Cash flow from financing activities pertains to finance raised for or repaid by the business and costs pertaining to it thereof, such as interest, dividends, etc. For the purposes of this exercise, I am not considering notes payable under financing activities, since it is more of an operating liability.

Common stock raised during the year = 81000-64800 = $16,200
The long term debt increase and the interest expense during the year of $8,100 are of the same amount and set each other off, so we can assume that the interest expense for the year has not been paid and it is a liability in the books. We can also assume that the increase in long term debt is due to the interest expense and not due to new capital raised.

Hence, the cash flow from financing activities = $16,200

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