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Lexington Company engaged in the following transactions during 2015,its first year in operation: (Assume all transactions are cash transactions)
1.Acquired $6,000 cash from issuing common stock.
2.Borrowed $4,400 from a bank.
3.Earned $6,200 of revenues.
4.Incurred $4,800 in expenses.
5.Paid dividends of $800.
Lexington Company engaged in the following transactions during 2016:
1.Acquired an additional $1,000 cash from the issue of common stock.
2.Repaid $2,600 of its debt to the bank.
3.Earned revenues,$9,000.
4.Incurred expenses of $5,500.
5.Paid dividends of $1,280.
-The net cash flow from financing activities on Lexington's 2016 statement of cash flows was
A)$2,880 outflow
B)$2,880 inflow
C)$1,000 outflow
D)$1,000 inflow

Question

Use the following information to answer questions 
Lexington Company engaged in the following transactions during 2015,its first year in operation: (Assume all transactions are cash transactions)
1.Acquired $6,000 cash from issuing common stock.
2.Borrowed $4,400 from a bank.
3.Earned $6,200 of revenues.
4.Incurred $4,800 in expenses.
5.Paid dividends of $800.
Lexington Company engaged in the following transactions during 2016:
1.Acquired an additional $1,000 cash from the issue of common stock.
2.Repaid $2,600 of its debt to the bank.
3.Earned revenues,$9,000.
4.Incurred expenses of $5,500.
5.Paid dividends of $1,280.
-The net cash flow from financing activities on Lexington's 2016 statement of cash flows was
A)$2,880 outflow
B)$2,880 inflow
C)$1,000 outflow
D)$1,000 inflow

Quizplus · Accepted Answer

The net cash flow from financing activities includes cash flows from issuing stock, borrowing, and paying dividends. In 2016, Lexington issued stock for $1,000 (inflow), repaid debt of $2,600 (outflow), and paid dividends of $1,280 (outflow). The net cash flow from financing activities is $1,000 - $2,600 - $1,280 = -$2,880, which is an outflow.

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