Exercise 11-13A Calculate financing cash flows (LO11-5) Dristell Inc. had the following activities during the year (all transact

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Exercise 11-13A Calculate financing cash flows (LO11-5) Dristell Inc. had the following activities during the year (all transact

ions are for cash unless stated otherwise): A building with a book value of $400,000 was sold for $500,000. Additional common stock was issued for $160,000. Dristell purchased its own common stock as treasury stock at a cost of $75,000. Land was acquired by issuing a 6%, 10-year, $750,000 note payable to the seller. A dividend of $40,000 was paid to shareholders. An investment in Fleet Corp.’s common stock was made for $120,000. New equipment was purchased for $65,000. A $90,000 note payable issued three years ago was paid in full. A loan for $100,000 was made to one of Dristell’s suppliers. The supplier plans to repay Dristell this amount plus 10% interest within 18 months. Required: Calculate net cash flows from financing activities. (Cash outflows should be indicated with a minus sign.)

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1 answer:

soldi70 [3.6K] · Answer 1 · 2026-02-23T22:22:22+03:00

Answer:

The total cash flow from financing activities amounts to -$45,000.

Explanation:

The calculation for financing activities' net cash flow is outlined below:

= Additional common stock issued - treasury stock purchase - dividends paid - long-term note payable issued

= $160,000 - $75,000 - $40,000 - $90,000

= -$45,000

All other transactions referenced in the question fall under investment activities.