单选题 Favor, Ine. ' s capital and related transactions during 2005 were as follows: On January 1, $1000000 of 5-year 10 percent annual interest bonds were issued to Cover In-dustries in exchange for old equipment owned by Cover. On June 30, $ 50000 of interest was paid to Cover On July 1, the bonds were returned to Favor in exchange for $1500000 par value six percent preferred stock. On December 31, preferred stock dividends of $ 45000 were paid to Cover. Favor, Inc. 's cash flow from financing (CFF) for 2005 (assume U. S. GAAP) is:

A、

A. $95000.
B、

B. $1045000.
C、

C. $45000.

【正确答案】 C

【答案解析】Issuing bonds in exchange for equipment does not affect cash flow. Interest paid is an operating cash flow. Exchanging bonds for stock does not affect cash, but should still be disclosed in a footnote to the Statement of Cash Flows. Dividends paid are considered financing activities. In this case, only the preferred stock dividends paid would be considered CFF.