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25 September, 20:55

Burich Co. reported short-term borrowings of $2.5 million, long-term borrowings of $6.8 million, repayments of long-term borrowings of $3.5 million, interest payments of $780,000, purchase of common stock shares for treasury of $.5 million, and cash dividends declared of $1.1 million. What is the cash flow from financing activities

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  1. 25 September, 23:55
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    Answer: $5,300,000 net cash inflow

    Explanation:

    The following can be gotten from the question:

    Short-term borrowings = $2.5 million, Long-term borrowings = $6.8 million

    Repayments of long-term borrowings = $3.5 million

    Interest payments = $780,000, Purchase of common stock shares for treasury = $0.5 million

    Cash dividends declared = $1.1 million.

    The cash flow from financing activities will be:

    Short-term borrowings = $2.5 million, Add: long-term borrowings = $6.8 million

    Less: Repayments of long-term borrowings = $3.5 million

    Less: Treasury stock purchase = $0.5 million

    = (2.5 + 6.8) - (3.5 + 0.5)

    = $9.3million - $4 million

    = $5.3 million
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