In Order to Prepare the Statement of Cash Flows for Rag

question 43

Multiple Choice

In order to prepare the statement of cash flows for Rag Dolls Corporation for 2014, the accountant has compiled the following data regarding cash flows:
$\begin{array}{llr} \text {Cash paid to acquire equity securities. } &\$370,000\\ \text { Proceeds from sale of equity securities } &17,500\\ \text { Proceeds from issuance of ordinary shares} &280,000\\ \text {Proceeds from issuance of bonds payable. } &55,000\\ \text { Payments to settle short-term debt} &32,500\\ \text { Interest and dividends received } &10,000\\ \text { Cash receipts from customers} &?\\ \text { Dividends paid } &130,000\\ \text { Cash paid to suppliers and employees } &1,030,000\\\text { Interest paid }&70,000\\ \text { Income taxes paid } &25,000\\ \text { Cash and cash equivalents,1January, 2014 } &43,000\\\text { Cash and cash equivalents, } 31 \text { December } 2014 &58,000\end{array}$

Using the above information, indicate the best answer for each question in the space provided. (Assume interest and dividends received and paid are classified as operating activities)

-Rag Dolls' cash flow from financing activities during 2014 is:

• A) $322,500 net cash from financing activities.
• B) $172,500 net cash from financing activities.
• C) $127,500 net cash from financing activities.
• D) $375,000 net cash from financing activities.

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Definitions:

Homestead Exemption

A legal provision that protects a portion of a homeowner's principal residence from creditors and reduces property tax.

Auction

A public sale in which goods or property are sold to the highest bidder.

Creditor

A party or institution to whom money is owed.

Default

The failure to fulfill an obligation, especially the failure to make payments on a loan.