Atkins Limited classifies interest paid and interest received as operating activities. Atkins Limited had the following cash flows during the reporting period: Consideration paid to acquire a subsidiary, net of cash acquired $150 000
Dividends paid $30 000
Repayment of borrowings $60 000
Interest paid on borrowings $24 000
Proceeds from sale of plant $100 000
The amount of the cash flows in relation to financing activities of Atkins Limited for the reporting period is:
A) Net cash inflow $90 000.
B) Net cash outflow $90 000.
C) Net cash inflow $30 000.
D) Net cash outflow $30 000.

Question

Quizplus · Accepted Answer

The only cash flow related to financing activities is the repayment of borrowings ($60,000) and the interest paid on borrowings ($24,000). These two cash outflows result in a net cash outflow of $90,000 for financing activities.

Atkins Limited Classifies Interest Paid and Interest Received as Operating