Use the Following Information to Answer Questions

question 16

Multiple Choice

Use the following information to answer questions
Lexington Company engaged in the following transactions during 2015,its first year in operation: (Assume all transactions are cash transactions)
1.Acquired $6,000 cash from issuing common stock.
2.Borrowed $4,400 from a bank.
3.Earned $6,200 of revenues.
4.Incurred $4,800 in expenses.
5.Paid dividends of $800.
Lexington Company engaged in the following transactions during 2016:
1.Acquired an additional $1,000 cash from the issue of common stock.
2.Repaid $2,600 of its debt to the bank.
3.Earned revenues,$9,000.
4.Incurred expenses of $5,500.
5.Paid dividends of $1,280.
-The net cash flow from financing activities on Lexington's 2016 statement of cash flows was

• A)$2,880 outflow
• B)$2,880 inflow
• C)$1,000 outflow
• D)$1,000 inflow

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Definitions:

Rights Offering

An issue of rights to existing shareholders allowing them to buy additional shares directly from the company at a discount before a public offering.

Seasoned Issue

A new offering of stock to the public from a company that has previously issued securities to the public.

Indirect Costs

Costs that are not directly tied to a specific project or product, such as administration, personnel and security costs.

Direct Costs

Expenses that can be directly linked to the production of a specific good or service, such as raw materials and labor.