Financing Activities

Financing activities include inflows and outflows of cash from transactions that either generate capital or repay capital provided to the company. As with investing activities, you must review the changes to equity accounts and noncurrent liabilities as well as collect any additional data related to equity accounts and noncurrent liabilities to correctly calculate the cash flows from financing activities.

APPLY THE CONCEPTS: Prepare the financing activities section

Additional financing activities data:

1. On February 1, 2013, Leonardo Inc. issued 12,800 shares of its $1 par value stock. The company received the par value for the shares and $25,600 in excess of par value. 2. Leonardo paid dividends of $9,600 to its stockholders on June 30, 2013.

Use a minus sign () to indicate an outflow of cash. No sign is needed to indicate an inflow of cash.

Complete the Statement of Cash Flows

After determining the cash flows from the operating, investing, and financing activities, the net change in cash can be calculated by totaling the cash flows from each of the activities. The net change in Cash is added to the Cash balance at the beginning of the period. The sum should be equal to the balance in Cash at the end of the year.

APPLY THE CONCEPTS: Complete the statement of cash flows

Use a minus sign () to indicate an outflow of cash. No sign is needed to indicate an inflow of cash.