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12 October, 09:07

Arkansas Corp. is preparing its statement of cash flows using the indirect method. It provides the following information about transactions for the year: Plant assets, netlong dashbeginning balance: $ 113 comma 000 Plant assets, netlong dashending balance: $ 147 comma 000 Equipment was purchased for $ 63 comma 000 with cash. Equipment with a net asset value of $12,000 was sold for $ 19 comma 000. Depreciation Expense of $ 15 comma 000 was recorded during the year. What was the amount of net cash provided by (used for) investing activities? A. $ (38 comma 000 ) B. $ (59 comma 000 ) C. $ (44 comma 000 ) D. $ 44 comma 000

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  1. 12 October, 09:28
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    C. $ (44 comma 000 )

    Explanation:

    The computation of cash flow from investing activity is shown below:

    Purchase of equipment for cash ($63,000)

    Sale of equipment ($19,000)

    Net cash flow from investing activity = - $63,000 + $19,000 = - $44,000

    In this activity, the purchase of fixed assets should be negative as it is an outflow of cash whereas the sale of fixed assets should be positive as it is an inflow of cash.
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