Oakdale Co. borrowed $1,960,000 cash from Eugene National Bank last year. In addition, the company repaid a $1,260,000 note payable to Michigan State Bank. How should these transactions be listed in the Statement of Cash Flows?
A. A decrease to cash for $1,260,000 is listed in the investing activities section and an increase of $1,960,000 is in the financing activities section.
B. Transactions must be shown separately as a decrease to cash for $1,260,000 and an increase of $1,960,000 in the financing activities section.
C. Oakdale can combine the transactions and show an increase to cash of $700,000 in the financing activities section of the statement.
D. Oakdale can combine the transactions and show an increase to cash of $700,000 in the investing activities section of the statement.
Answer: B
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