Question

Selected information from Curl Salon’s accounting records and financial statements for 2018 is as follows ($ in millions): Cash paid to acquire equipment = $20 Treasury stock purchased for cash = $22 Proceeds from sale of land and buildings = $45 Gain from the sale of land and buildings = $16 Interest and dividends received on investments = $33 Cash paid to acquire office equipment = $40 Curl uses USGAAP. On its statement of cash flows, the company should report net cash flows from investing activities of:

Answer 1

Answer:

The multiple choices are:

$15 million net outflow

$37 million net outflow

$30 million net inflow

$ 1 million net inflow

The cash option is$15 million net cash outflow

Explanation:

The net cash flows from the investing activities that Curl Salon should record comprises of cash paid to acquire equipment,proceeds from sale of land and buildings,dividends received from investment as well as cash paid to acquire office equipment,which are summarized below:

                                                        $ millions

Cash paid to acquire equipment   (20)

proceeds from land and building  45

cash paid for office equipment     (40)

cash outflow                                    (15)

The correct option is an outflow of $15 million