Asked by Feisty Mochi on May 07, 2024
Verified
Atkins Limited classifies interest paid and interest received as operating activities. Atkins Limited had the following cash flows during the reporting period: Consideration paid to acquire a subsidiary, net of cash acquired $150 000
Dividends paid $30 000
Repayment of borrowings $60 000
Interest paid on borrowings $24 000
Proceeds from sale of plant $100 000
The amount of the cash flows in relation to financing activities of Atkins Limited for the reporting period is:
A) Net cash inflow $90 000.
B) Net cash outflow $90 000.
C) Net cash inflow $30 000.
D) Net cash outflow $30 000.
Financing Activities
Transactions that result in changes in the size and composition of the equity and borrowings of an entity, as reported in the cash flow statement.
Repayment of Borrowings
The process of paying back borrowed funds to creditors, including the principal amount and any applicable interest.
- Distinguish and organize cash flows related to financing activities.
- Assess and quantify the net cash moves in and out due to various enterprises.
Verified Answer
MM
Mario MurielMay 11, 2024
Final Answer :
B
Explanation :
The only cash flow related to financing activities is the repayment of borrowings ($60,000) and the interest paid on borrowings ($24,000). These two cash outflows result in a net cash outflow of $90,000 for financing activities.
Learning Objectives
- Distinguish and organize cash flows related to financing activities.
- Assess and quantify the net cash moves in and out due to various enterprises.
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