53. Borrowing long-term debt $200,000; Payment of cash dividends $15,000; Repurchase of treasury stock $40,000. What is the total cash flow from investing activities?
Answer: D
Total cash flow from investing activities is –$55,000.
The total cash flow from investing activities is calculated by considering the cash outflows related to investments. In this case, the cash outflows include the payment of cash dividends and the repurchase of treasury stock, resulting in a total cash outflow of $55,000.
A) $280,000
This option incorrectly suggests a positive cash flow from investing activities. However, the activities listed involve cash outflows rather than inflows. Thus, this figure does not accurately represent the cash flow from the given activities.
B) –$310,000
This choice represents an incorrect total cash flow calculation. The figure does not account for the specific cash flows related to the investing activities under consideration, leading to an overestimation of the cash outflows.
C) –$325,000
This option is also incorrect as it overstates the cash outflows from investing activities. The only relevant cash flows from the question are the cash dividends and the treasury stock repurchase, which do not total this amount.
D) –$55,000
This is the correct answer as it accurately reflects the total cash outflows from investing activities. The total cash outflow is derived from the $15,000 payment of cash dividends and the $40,000 repurchase of treasury stock, totaling $55,000.
Conclusion
The correct answer is definitively –$55,000 because it accurately accounts for the cash outflows specifically related to investing activities. All other options fail to correctly represent the net cash flow based on the provided financial activities, either by miscalculating or misunderstanding the nature of the transactions.