Question

Partial balance sheets for Yarborough Company and additional information are found below. Yarborough Company Partial Balance Sheets as of December 31 2021 2020 Assets Equipment $100,000 $75,000 Accumulated depreciation (25,000) (20,000) Shareholders' equity Common stock, $5 par $150,000 $100,000 Paid-in capital-excess of bar 20,000 0Retained earnings $40,000 $30,000Additional information for 2018: July 1: Issued 10,000 shares of common stock for cash.July 1: Purchased new equipment for cash. Dec. 31: Paid cash dividends of $30,000. Required: Prepare the investing activities section of the statement of cash flows for 2018.

Answer 1

Answer:

Net cash flows from investing activities ($25,000)

Explanation:

The preparation of the investing activities section is presented below

Cash flows from investing activities

Purchase of equipment (25000) ($100,000 - $75,000)

Net cash flows from investing activities ($25,000)

Since the purchase of an equipment shows the outflow of cash so the same should be presented on the negative sign