During year 2, Teb, Inc. had the following activities related to its financial operations:
Payment for the early retirement of long-term bonds payable (carrying value $740,000) $750,000
Distribution in year 2 of cash dividend declared in year 1 to preferred shareholders 62,000
Carrying value of convertible preferred stock in Teb, converted into common shares 120,000
Proceeds from sale of treasury stock (carrying value at cost, $86,000) 95,000
In Tebβs year 2 statement of cash flows, net cash used in financing activities should be
$716,000
$535,000
$597,000
$717,000
Answer – so Common Stock Dividends are in Operating but Preferred Stock Dividends should be part of Financing ?
Cash paid to retire bonds payable $(750,000)
Payment of cash dividend (62,000)
Sale of treasury stock 95,000
…………………………….. $(717,000)
.