Trident Corporation had the following cash flows in the current year. Which of the following will be categorized under the financing activities section of the statement of cash flows?
A) Rent on a warehouse amounting to $1.1 million
B) Purchase of $125,000 worth of five-year bonds issued by Towson Utilities
C) Preferred dividends of $330,000 paid to shareholders
D) Lease income received on a piece of land

Question

Quizplus · Accepted Answer

Preferred dividends paid to shareholders are categorized under financing activities because they represent cash outflows to investors, which are related to the company's financing structure.

Trident Corporation Had the Following Cash Flows in the Current