Question

Modern Movables Corporation is a Virginia-based manufacturer of furniture. In a recent quarter, it reported the following activities: Net income $ 4,535 Purchase of equipment 911 Borrowings under line of credit (bank) 1,457 Proceeds from issuance of common stock 15 Cash received from customers 29,564 Payments to reduce notes payable (long-term) 50 Sale of investments 138 Proceeds from sale of equipment 6,994 Dividends paid 281 Interest paid 94
Based on this information, present the cash flows from investing and financing activities sections of the cash flow statement.

Answer 1

Answer and Explanation:

The preparation of the cash flows from investing and financing is presented below:

Cash flows from investing activities:

Purchase of equipment -$911  

Sale of investment $138  

Sale of equipment $6,994  

Net cash flow from investing activities  $6,221

Cash flow from financing activities  

Borrowing $1,457  

Issue common Stock $15  

Payment of notes payable -$50  

Dividend paid -$281  

Net cash flow from financing activities  $1,141

The positive amount reflects the cash inflow and negative amount reflects the  cash outflow