Question

A company had the following cash flows for the year: (a) Purchased inventory, $60,000 (b) Sold goods to customers, $90,000 (c) Received loan from a local bank, $150,000 (d) Purchased land, $180,000 (e) Purchased treasury stock, $40,000 (f) Paid dividends, $10,000 (g) Sold delivery truck, $30,000 What amount would be reported for net investing cash flows on the Statement of Cash Flows (for a negative number put a minus in front of the number)?

Answer 1

Answer:

The amount would be reported for net investing cash flows on the Statement of Cash Flows is –$190,000, that is, minus $190,000.

Explanation:

Cash flow from investing activities refers to the section of the cash flow statement that provides amount of cash that is generated or spent on investing activities.

Investing activities comprises of purchases or sales property plant, and equipment (PP&E), marketable securities (i.e., stocks, bonds, etc.), and among others.

From the question, the amount of net investing cash flows can be computed as follows:

Particulars                                                     Amount ($)

Purchased land                                              –180,000

Purchased treasury stock                               –40,000

Sold delivery truck                                            30,000  

Net cash flow from investing activities     –190,000  

Therefore, the amount would be reported for net investing cash flows on the Statement of Cash Flows is –$190,000, that is, minus $190,000.