How would this transaction be reported within the cash flow from financing activities section of the cash flow statement?

A) An inflow of $215,000.
B) An outflow of $215,000.
C) An outflow of $35,000.
D) It would not be reported in the financing activities section.

Question

Siddhi Kashyap · Accepted Answer

Final Answer : D, Explanation :  The transaction involves acquiring a machine through a down payment and a note payable, which affects investing and financing activities respectively. However, the cash flow from financing activities only includes the inflows and outflows of cash related to borrowing and repaying debts, issuing and buying back shares, and paying dividends. Since the note payable represents a non-cash financing activity, it does not directly affect the cash flows and thus is not reported in the cash flow from financing activities section. The cash paid ($35,000) is related to the purchase of the machine, which is an investing activity, not a financing activity.

How would this transaction be reported within the cash flow from financing activities section of the cash flow statement?

A) An inflow of $215,000.
B) An outflow of $215,000.
C) An outflow of $35,000.
D) It would not be reported in the financing activities section.

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How would this transaction be reported within the cash flow from financing activities section of the cash flow statement?A) An inflow of $215,000.B) An outflow of $215,000.C) An outflow of $35,000.D) It would not be reported in the financing activities section.

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Learning Objectives

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Related questions

How would this transaction be reported within the cash flow from financing activities section of the cash flow statement?

A) An inflow of $215,000.
B) An outflow of $215,000.
C) An outflow of $35,000.
D) It would not be reported in the financing activities section.