Use the following cash flow data of Haven Hardware for the year ended 31 December 2013. What is the net cash provided by or used in financing activities of Haven Hardware?
A)($10 000)
B)($120 000)
C)$10 000
D)$120 000

Question

Use the following cash flow data of Haven Hardware for the year ended 31 December 2013.  What is the net cash provided by or used in financing activities of Haven Hardware?
A)($10 000) 
B)($120 000) 
C)$10 000 
D)$120 000

Quizplus · Accepted Answer

The net cash provided by or used in financing activities is calculated by adding up the cash inflows and outflows from financing activities, which are listed in the financing section of the cash flow statement. In this case, the cash inflows from financing activities are $80,000 from the issuance of long-term debt and $50,000 from the issuance of common stock, for a total cash inflow of $130,000. The cash outflows from financing activities are $250,000 in dividends paid and $0 for the repayment of long-term debt, for a total cash outflow of $250,000. Therefore, the net cash provided by or used in financing activities is -$120,000, which means that Haven Hardware used $120,000 of cash in financing activities.

Use the Following Cash Flow Data of Haven Hardware for the Year