Use the following information for questions 22-23.
ecaHecaRoss Corp.'s transactions for calendar 2020 included the following:
1. Acquired 50% of Lennox Ltd.'s common shares for $ 90,000 cash.
2. Issued 5,000 preferred shares in exchange for land with a fair value of $ 160,000.
3. Issued 11% bonds, par value $ 200,000, due 2020, for $ 196,000 cash.
4. Purchased a patent for $ 110,000 cash.
5. Borrowed $ 90,000 from Bank A.
6. Paid $ 60,000 toward a bank loan with Bank B.
7. Sold long-term investments for $ 398,000.
-The cash provided by financing activities in 2020 was
A) $ 136,000.
B) $ 226,000.
C) $ 286,000.
D) $ 296,000.

Question

Quizplus · Accepted Answer

Financing activities include transactions involving debt, equity, and dividends. Here, the relevant transactions are: 1) Issuing preferred shares does not count as it's an exchange transaction, not cash. 2) Issuing bonds for cash ($196,000), 3) Borrowing from Bank A ($90,000), and 4) Repayment of the bank loan with Bank B (-$60,000). Adding these gives $196,000 + $90,000 - $60,000 = $226,000.

Use the Following Information for Questions 22-23