Creative Sound Systems sold investments, land, and its own common stock for $32.0 million, $14.8 million, and $39.6 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $20.8 million, $24.8 million, and $11.8 million, respectively. What amount should Creative Sound Systems report as net cash flows from financing activities

Question

Business

Levi Keith

21 June, 13:42

Creative Sound Systems sold investments, land, and its own common stock for $32.0 million, $14.8 million, and $39.6 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $20.8 million, $24.8 million, and $11.8 million, respectively. What amount should Creative Sound Systems report as net cash flows from financing activities

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Answers (1)

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Meadow Dunlap · Answer 1

Creative Sound Systems should report $18,800,000 as net cash flows from financing activities

Explanation:

Cash flow Financing activities are the funds that the business acquire or paid to finance its main activities, these involve borrowing and repaying short-term loans, long-term loans and other long-term liabilities.

From the question, Cash inflow from Issue of common share and Cash outflow from purchase of treasury stock are the only recognizable Financing activities

Particulars Amount

Cash inflow from Issue of common share $39,600,000

Cash outflow from purchase of treasury stock - $20,800,000

Net cash flows from financing activities $18,800,000