A Company's Activities for the Year Ended December 31, 2021

question 51

Multiple Choice

A company's activities for the year ended December 31, 2021 included the following: • Declared and issued a stock dividend valued at $50,000.
• Paid $975,000 to repurchase bonds at amortized cost. The book value of the bonds was $1,000,000.
• Made a $20,000 principal payment on a bank loan.
How much will be presented as cash flow from financing activities?

• A)$955,000
• B)-$975,000
• C)$980,000
• D)-$995,000

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Definitions:

Holdback Money

Funds retained by one party in a transaction as security or leverage until certain conditions are met.

Tax Liabilities

Financial obligations imposed by governments that are required to be paid, such as income tax, corporate tax, and sales tax.

Escrow Account

A financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction.

Purchase Price

The cost at which a product or service is bought, excluding additional expenses like shipping or taxes.