A company had the following cash flows for the year: (a) Purchased land, $60,000 (b) Borrowed from a local bank, $100,000 (c) Increase in salaries payable, $50,000 (d) Issued common stock, $75,000 (e) Paid dividends, $20,000 (f) Sold equipment, $40,000 (g) Increase in accounts receivable, $120,000 What amount would be reported for net investing cash flows in the statement of cash flows?

Question

Madalynn Ward

Business

24 March, 12:16

A company had the following cash flows for the year: (a) Purchased land, $60,000 (b) Borrowed from a local bank, $100,000 (c) Increase in salaries payable, $50,000 (d) Issued common stock, $75,000 (e) Paid dividends, $20,000 (f) Sold equipment, $40,000 (g) Increase in accounts receivable, $120,000 What amount would be reported for net investing cash flows in the statement of cash flows?

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Answers (1)

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Deon Klein · Answer 1

Net cash flow used by investing activities = $ (20,000)

Explanation:

Investing cash flow in the statement of cash flow measures how much cash a company will generate or spend from the addition or disposal of non-current assets and investments.

Net investing cash flows in the statement of cash flows:

A) Purchased land = $ (60,000)

F) Sold equipment = $ 40,000

Net cash flow used by investing activities = $ (20,000)

Option B, D, and E are the financing activities. Option C and G are the operating activities.