Question

Arkansas Corp. is preparing its statement of cash flows using the indirect method. It provides the following information about transactions for the​ year: Plant​ assets, netlong dashbeginning ​balance: $ 113 comma 000 Plant​ assets, netlong dashending ​balance: $ 147 comma 000 Equipment was purchased for $ 63 comma 000 with cash. Equipment with a net asset value of​ $12,000 was sold for $ 19 comma 000. Depreciation Expense of $ 15 comma 000 was recorded during the year. What was the amount of net cash provided by​ (used for) investing​ activities? A. ​$(38 comma 000​) B. ​$(59 comma 000​) C. ​$(44 comma 000​) D. $ 44 comma 000

Answer 1

Answer:

C. ​$(44 comma 000​)

Explanation:

The computation of cash flow from investing activity is shown below:

Purchase of equipment for cash ($63,000)

Sale of equipment ($19,000)

Net cash flow from investing activity = - $63,000 + $19,000 = - $44,000

In this activity, the purchase of fixed assets should be negative as it is an outflow of cash whereas the sale of fixed assets should be positive as it is an inflow of cash.