As of January 1, Year 2, Room Designs Inc. had a balance of $9,900 in Cash, $3,500 in Common Stock, and $6,400 in Retained Earnings. These were the only accounts with balances in the ledger on January 1, Year 2. Further analysis of the company's cash account indicated that during the Year 2 accounting period, the company had (1) net cash inflow from operating activities of $9,800, (2) net cash outflow for investing activities of $16,500 and (3) net cahs flow from financing activities of $11,000. All revenue and expenses events were cash events. The following account and balances represent the general ledger of Room Design Inc as December 31, 2013 before closing. Assets = Liabilities + Stockholder's equityCash 14,200 Notes payable 9000 Common stock 7500 Revenue 18,100Land 16,500 Ret. Earning 6400 Expenses 8,300 Dividents 2000What did the company purchase that resulted in the cash outflow from investing activities?

Question

Anabelle Bell

Business

5 April, 06:01

As of January 1, Year 2, Room Designs Inc. had a balance of $9,900 in Cash, $3,500 in Common Stock, and $6,400 in Retained Earnings. These were the only accounts with balances in the ledger on January 1, Year 2. Further analysis of the company's cash account indicated that during the Year 2 accounting period, the company had (1) net cash inflow from operating activities of $9,800, (2) net cash outflow for investing activities of $16,500 and (3) net cahs flow from financing activities of $11,000. All revenue and expenses events were cash events. The following account and balances represent the general ledger of Room Design Inc as December 31, 2013 before closing. Assets = Liabilities + Stockholder's equityCash 14,200 Notes payable 9000 Common stock 7500 Revenue 18,100Land 16,500 Ret. Earning 6400 Expenses 8,300 Dividents 2000What did the company purchase that resulted in the cash outflow from investing activities?

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Marshall Cain · Answer 1

What did the company purchase that resulted in the cash outflow from investing activities?

It purchases Land for 16,500

Explanation:

The investing activities outflow will be for the purchase of long tem assets in cash.

The complete cash outflow for investing activities is explain it through the land account:

cash outflow: 16,500

land: 16,500

There are no other long-term assets which can explain the variance plus, the land account covers the amount entirely.