Question

"financing activities" Creative Sound Systems sold investments, land, and its own common stock for $35.0 million, $15.5 million, and $41.0 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $21.5 million, $25.5 million, and $12.5 million, respectively.

Answer 1

Answer:

The flow of cash of C Company from investing activity is $12.5 million

Explanation:

Recall that

The statement of cash flows comprises of three activities. The ones associated with the general operations of the company are refereed to as operating activities.

investing activities refers  various investments in assets, their sale or purchase. while financing activities refers to activities that affect the capital with liabilities.

The Computation of cash flows from investing activity is given below:

Statement showing cash flow of activities from investing activities of Creating sound systems company

Particulars                                                Amount (In millions)

The sale of investment                                 35

The sale of land                                            15.5

Purchase of equipment                              - 25.5

Purchase of Patent                                      - 12.5

The flow of cash from investing

activities                                                          12.5

Therefore,

The cash flow of investing activities C company is 12. 5 million

or we can compute as follows:

Cash flow from investing activities = Sale of investment + sale of land - purchase of equipment = Purchase of potent

which is

= $ 35 million + $15 million - $ 25 million - 12.5 million

= $ 12.5 million

Therefore, the flow of cash from investing activity is $12.5 million.