Question

Randal Corporation recorded the following activity for the year just ended: Proceeds from sale of property $300,000 Cash received from customers $120,000 Issuance of common stock $180,000 Issuance of bonds payable $500,000 Dividends paid to stockholders $130,000 Purchase of equipment $400,000 The net cash provided by (used in) investing activities for the year was: $100,000 ($100,000) ($400,000) $400,000

Answer 1

Answer: $100,000 outflow

Explanation: Investing activities refers to those activities in a  cash flow statement that are related to purchase or sale of long term assets. The sale of assets results inflow of cash and purchase of assets results in outflow of cash.

In the given case, it can be computed as follows :-

cash flow from investing activities = sale of property - purchase of equipment

                                                             = $300,000 - $400,000

                                                             = $100,000 outflow