Refer to Exhibit 22-2.What is Rollins' net cash used ( ) by financing activities?

A) $(1, 240)
B) $(1, 650)
C) $(1, 860)
D) $(2, 150)

Question

Refer to Exhibit 22-2.What is Rollins' net cash used ( ) by financing activities?A) $(1, 240)B) $(1, 650)C) $(1, 860)D) $(2, 150)

Kurrei Dixon · Accepted Answer

Final Answer : B, Explanation :  To calculate the net cash used by financing activities, we need to look at the changes in long-term liabilities, stockholder's equity, and dividends paid.From the exhibit, we can see that long-term borrowing increased by $800 and dividends paid was $1,850. However, we do not have information on any new stock issuance or treasury stock transactions.To calculate the change in stockholder's equity, we can use the formula:Ending SE = Beginning SE + Net Income - Dividends PaidPlugging in the numbers from the exhibit, we get:Ending SE = $40,000 + $11,000 - $1,850 = $49,150Therefore, the change in SE is:SE Ending - SE Beginning = $49,150 - $40,000 = $9,150Now we can calculate the net cash used by financing activities:Net cash used by financing = Increase in long-term borrowing + Change in stockholder's equity - Dividends paidNet cash used by financing = $800 + $9,150 - $1,850 = -$1,650The negative sign indicates that cash was provided, rather than used, by financing activities. Therefore, the correct answer is B) $(1,650).

Refer to Exhibit 22-2.What is Rollins' net cash used ( ) by financing activities?

A) $(1, 240)
B) $(1, 650)
C) $(1, 860)
D) $(2, 150)

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Related questions

Refer to Exhibit 22-2.What is Rollins' net cash used ( ) by financing activities?A) $(1, 240) B) $(1, 650) C) $(1, 860) D) $(2, 150)

Definitions

Learning Objectives

Learning Objectives

Related questions

Refer to Exhibit 22-2.What is Rollins' net cash used ( ) by financing activities?

A) $(1, 240)
B) $(1, 650)
C) $(1, 860)
D) $(2, 150)