In Preparing a Company's Statement of Cash Flows for the Most

question 70

Multiple Choice

In preparing a company's statement of cash flows for the most recent year, Ransom Corp. reported the following information: $\begin{array}{llr} \text {Repayment of outstanding bonds } &\$107,000\\ \text {Purchase of treasury stock } &62,000\\ \text { Issuance of common stock } &46,000\\ \text { Payment of cash dividends } &15\end{array}$


Net cash flows from financing activities for the year were:

• A) $230,000 of net cash provided.
• B) $108,000 of net cash used.
• C) $138,000 of net cash provided.
• D) $230,000 of net cash used.
• E) $138,000 of net cash used.

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Definitions:

Other Expenses

Costs not directly related to the production of goods or services, such as administrative and marketing expenses.

Fixed Cost

Costs that do not change with the level of production or sales volume, remaining constant regardless of business activities.

Planning Budget

An initial budget created using the assumptions of a particular level of activity to guide a company's financial decisions.

Net Operating Income

A financial metric that measures a company's profitability from its core business operations, excluding the effects of financing and taxes.