Santa Fe Company was started on January 1, Year 1, when it acquired $9,000 cash by issuing common stock. During Year 1, the company earned cash revenues of $4,500, paid cash expenses of $3,750, and paid a cash dividend of $250. Which of the following is true based on this information?
A. The Year 1 statement of cash flows would show net cash inflow from operating activities of $4,500.
B. The Year 1 statement of cash flows would show a net cash inflow from financing activities of $8,750.
C. The December 31, Year 1 balance sheet would show total equity of $8,750.
D. The Year 1 income statement would show net income of $500.
Answer: B
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