Two years ago, Bethel, Inc. bought $47,500 in bonds from another company. This month, it sold half of those bonds for $22,040 and purchased the common stock of another company for $1,700. On the statement of cash flows for this accounting period, Bethel would report a net cash:

Multiple Choice

a. inflow of $22,040 from investing activities.

b. outflow of $20,340 from investing activities.

c. outflow of $22,040 from investing activities.

d. inflow of $20,340 from investing activities.

Question

Jayvion Hoover

Business

25 September, 16:14

Two years ago, Bethel, Inc. bought $47,500 in bonds from another company. This month, it sold half of those bonds for $22,040 and purchased the common stock of another company for $1,700. On the statement of cash flows for this accounting period, Bethel would report a net cash:

Multiple Choice

a. inflow of $22,040 from investing activities.

b. outflow of $20,340 from investing activities.

c. outflow of $22,040 from investing activities.

d. inflow of $20,340 from investing activities.

+4

Answers (1)

Know the Answer?

Tyree Simon · Answer 1

The correct option is D

Explanation:

The net cash will be computed as:

Net Cash = Bonds sold amount - Purchases amount of common stock

where the values are:

Bonds sold amount is $22,040

Purchases amount of common stock is $1,700

Putting the values:

= $22,040 - $1,700

= $20,340

The net cash amounts to $20,340 which is an inflow from the investing activities.