Question

In preparing its cash flow statement for the year ended December 31, 2021, Rorschach Co. gathered the following data: Gain on sale of land $ 12,000 Proceeds from sale of land 20,000 Purchase of Uttwil, Inc., bonds (face value $200,000) 360,000 Amortization of bond discount 4,000 Cash dividends declared 90,000 Cash dividends paid 76,000 Proceeds from sales of Rorschach Co. common stock 150,000 In its December 31, 2021, statement of cash flows, what amount should Rorschach report as net cash outflows from investing activities?

Answer 1

Answer:

($340,000)

Explanation:

The computation of the net cash outflows from investing activities is shown below:

Cash flows from investing activities:  

Cash from proceeds of sale of land $20,00

Purchase of Bond investments ($360,000)

Net Cash Outflows from investing activities ($340,000)

The positive sign shows the inflow of cash and the negative sign shows the outflow of cash and the same is considered in the above computation part