Question

Riverbed Corporation had the following activities in 2020. 1. Sale of land $186,000 4. Purchase of equipment $428,000 2. Purchase of inventory $923,000 5. Issuance of common stock $332,000 3. Purchase of treasury stock $68,000 6. Purchase of available-for-sale debt securities $64,000 Compute the amount Riverbed should report as net cash provided (used) by investing activities in its 2020 statement of cash flows.

Answer 1

Answer:

net cash flow used $306,000

Explanation:

The cash flow statements show the activities of the entity in relation to cash movement under 3 groups namely; Operating, Investing and Financing activities.

1. Sale of land $186,000 - Investing

4. Purchase of equipment $428,000 - Investing

2. Purchase of inventory $923,000 - Operating

5. Issuance of common stock $332,000 - Financing

3. Purchase of treasury stock $68,000  - Financing

6. Purchase of available-for-sale debt securities 64,000 - Investing

Net cash provided (used) by investing activities in its 2020 statement of cash flows

= $186,000 - $428,000 - $64,000

= -$306,000

This is a net cash flow used $306,000