Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)
1) Acquired $1,850 cash from the issue of common stock.2) Borrowed $1,320 from a bank.3) Earned $1,500 of revenues cash.4) Paid expenses of $430.5) Paid a $230 dividend.During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)1) Issued an additional $1,225 of common stock.2) Repaid $850 of its debt to the bank.3) Earned revenues of $1,650 cash.4) Incurred expenses of $720.5) Paid dividends of $280.What is the amount of Packard Company's net cash flow from financing activities for Year 2?
A) Net inflow of $945.
B) Net outflow of $1,130.
C) Net outflow of $850.
D) Net inflow of $95.

Question

Quizplus · Accepted Answer

Financing activities include issuing common stock, repaying bank debt, and paying dividends. In Year 2, Packard issued $1,225 of common stock (inflow), repaid $850 of its debt (outflow), and paid dividends of $280 (outflow). The net cash flow from financing activities is $1,225 - $850 - $280 = $95 (net inflow).

Packard Company Engaged in the Following Transactions During Year 1