Based on the following information, compute cash flows from financing activities under GAAP.
Purchase of investments $ 250
Dividends paid 1,200
Interest paid 400
Additional borrowing from bank 2,800

Respuesta :

Based on the financial transactions listed, and the GAAP definition of financing activities, the cashflows from financing activities is $1,600.

What is the cashflow from financing actvities?

Under GAAP, the only entries that go into financing activities are Dividends and additional borrowing because these relate to Equity and long term borrowing.

The cash flow from financing activities is therefore:

=  Additional borrowing - dividends paid

= 2,800 - 1,200

= $1,600

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