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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.

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Answers (1)
  1. 25 September, 16:24
    0
    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.
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