Question

Use the information presented in BE5-14 for Martinez Corporation to compute the net cash used (provided) by financing activities.

BE5-14 (L05) Martinez Corporation engaged in the following cash transactions during 2017.

Sale of land and building $191,000

Purchase of treasury stock 40,000

Purchase of land 37,000

Payment of cash dividend 95,000

Purchase of equipment 53,000

Issuance of common stock 147,000

Retirement of bonds 100,000

Compute the net cash provided (used) by investing activities.

Short answer

The cash used in financing activities is equal to$88,000.

Step-by-step solution

Definition of Financing Activities

The capital generates activities that include the issue of securities, either debt or equity, which are considered financing activities. It also provides for the redemption of securities issued.

Financing Activities

Particular	Amount $
Purchase of treasury stock	($40,000)
Payment of cash dividend	(95,000)
Issuance of common stock	147,000
Retirement of bonds	(100,000)
Cash used in financing activities	($88,000)