Lindgren Corporation's most recent comparative balance sheet appears below:
-The net cash provided by (used by) financing activities for the year was:
A) ($5)
B) ($21)
C) $4
D) $12

Question

Lindgren Corporation's most recent comparative balance sheet appears below: 
-The net cash provided by (used by) financing activities for the year was:
A) ($5) 
B) ($21) 
C) $4 
D) $12

Quizplus · Accepted Answer

To calculate the net cash provided by financing activities, we must compare the financing amounts from the two balance sheets. From the given balance sheets, we can see that the long-term debt increased from $26 to $32, and the common stock remained the same at $20. However, we also see that the cash balance decreased from $15 to $8. Therefore, the company used $7 of its cash to pay down its long-term debt, resulting in net cash used by financing activities of ($7) for the year. However, the question asks for the answer in whole dollars, so the closest option is ($5).

Lindgren Corporation's Most Recent Comparative Balance Sheet Appears Below