Question

Arrow Printers paid $2,000 interest on short-term notes payable, $10,000 interest on long-term bonds, and $6,000 in dividends on its common stock. Arrow would report cash outflows from activities, as follows:

Operating, $2,000; financing, $16,000.
Operating, $0; financing, $18,000.
Operating, $12,000; financing, $6,000.
Operating, $18,000; financing, $0.

Answer 1

Answer: B

Explanation: Operating $0; Financing $18,000.00

This is because all the listed expenses are related to the financing arm of the business.