Dividends paid

Hello Sir,

For the below Q

Why in their solution for the net cash generated or used in operating activities they deducted the dividens paid.As per my knowledge dividends paid will be deducted from cash generating from financing activities .

Thanks,

———————-
Q
The following scenario relates to question 21 – 25
Grace Co is in process of creating its statement of cash flows for the year ended 31
December 2017. The relevant income statement and statement of financial position
are as follows:
Income Statement for the Year Ended 31 December 2017
$’000
Sales 810
Cost of goods sold (140)
Gross profit 670
Depreciation (90)
Admin expenses (20)
Loss on disposal of non-current asset (20)
Operating profit 540
Interest paid (30)
Taxation (160)
Net profit 350
Statement of Financial Position as at 31 December
2017 2016
$’000 $’000
Non-current assets
Cost 1,460 1,400
Depreciation 250 200
1,210 1,200
Current assets
Inventory 45 35
Trade receivables 60 65
Cash and bank 25 20
130 120
Total assets 1,340 1,320
Equity and liabilities
Share capital 310 300
Share premium 125 120
Retained earnings 695 400
1,130 820
Loan 90 380
Trade payables 40 70
Taxation 80 50
1,340 1,320

Additional Information:
Dividends of $55,000 were paid during the year. The company purchased a new
noncurrent asset of $100,000 in cash during the year.

22. What is the net cash generated from (or used in) operating activities?
A) $400,000
B) $215,000
C) ($400,000)
D) ($215,000)

————–
Answer
22. A
Cash generated from operations $615,000
Interest paid ($30,000)
Dividends paid ($55,000)
Tax paid (50 + 160 – 80) (130,000)
Net cash from operating activities $400,000