Please refer to Table 3-2 for the following questions.
Table 3-2
Enigma has the following financial information:

No changes were made in interest payable or taxes payable.
-A firm paid dividends of $10,000,paid interest of $20,000,reduced debt principal outstanding (paid off debt)in the amount of $100,000,and sold new stock for $150,000.What was the firm's cash flow from financing activities?
A) +$20,000 ($20,000 flowed into the firm)
B) -$20,000 ($20,000 flowed out of the firm)
C) +$280,000 ($280,000 flowed into the firm)
D) -$280,000 ($280,000 flowed out of the firm)

Question

Please refer to Table 3-2 for the following questions.
Table 3-2
Enigma has the following financial information:
  
No changes were made in interest payable or taxes payable.
-A firm paid dividends of $10,000,paid interest of $20,000,reduced debt principal outstanding (paid off debt)in the amount of $100,000,and sold new stock for $150,000.What was the firm's cash flow from financing activities?
A) +$20,000 ($20,000 flowed into the firm) 
B) -$20,000 ($20,000 flowed out of the firm) 
C) +$280,000 ($280,000 flowed into the firm) 
D) -$280,000 ($280,000 flowed out of the firm)

Quizplus · Accepted Answer

Cash flow from financing activities includes dividends paid, net changes in debt, and net changes in equity. Here, dividends paid out ($10,000) and debt reduction ($100,000) are cash outflows, while selling new stock ($150,000) is a cash inflow. The net cash flow from financing activities is $150,000 - $10,000 - $100,000 = $40,000 inflow, which is not an option provided. However, based on the options given, none directly match the correct calculation, suggesting a possible error in the question or answer choices. Given the options, none accurately reflect the correct calculation of cash flow from financing activities based on the provided data.

Please Refer to Table 3-2 for the Following Questions