Avatar Company Uses the Indirect Method to Prepare Its Statement

Multiple Choice

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following information for the year 2014:
$$\begin{array} { l r } \text { Long-term notes payable, beginning balance } & \$ 90,000 \\\text { Long-term notes payable, ending balance } & 84,000 \\\text { Common stock, beginning balance } & 2,000 \\\text { Common stock, ending balance } & 30,000 \\\text { Retained earnings, beginning balance } & 74,000 \\\text { Retained earnings, ending balance } & 113,000 \\\text { Treasury stock, beginning balance } & 5,000 \\\text { Treasury stock, ending balance } & 8,000\end{array}$$
• No stock was retired.
• No treasury stock was sold.
• During 2014, the company repaid $40,000 of long-term notes payable.
• During 2014, the company borrowed $34,000 on a new note payable.
• Net income for the year was $49,000.
How much was the net cash flow from financing activities?

A) $59,000 positive cash flow
B) $42,000 positive cash flow
C) $9,000 negative cash flow
D) $9,000 positive cash flow