Based on the following information, compute cash flows from financing activities under GAAP. Purchase of investments$ 210Dividends paid1,160Interest paid360Additional borrowing from bank2,600

Purchase of Investments ($210):This represents the acquisition of financial assets and is classified as an investing activity in the statement of cash flows.Dividends Paid ($1,160):Dividends are cash payments made to stockholders, representing a return of funds to the company's owners. This is a financing activity.Interest Paid ($360):Payment of interest on long-term debt or investments is considered a cost of financing the company's ongoing operations. This is included in operating activities.Additional Borrowing from Bank ($2,600):Borrowing money increases the company's liabilities, providing capital. This is a financing activity.Working Notes:-Hence, Net cash flow from financing activities is $1,440.

Answered: Based on the following information,…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter12: The Statement Of Cash Flows

Section: Chapter Questions

Problem 12.20MCE

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Based on the following information, compute cash flows from financing activities under GAAP.

Purchase of investments	$ 210
Dividends paid	1,160
Interest paid	360
Additional borrowing from bank	2,600

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