Question

Exercise 11-12B Calculate investing cash flows (LO11-4) A company had the following activities during the year (all transactions are for cash unless stated otherwise): a. A building with a book value of $400,000 was sold for $500,000 b. Additional common stock was issued for $160,000. c. The company purchased its own common stock as treasury stock at a cost of $75,000 d. Land was acquired by issuing a 6%, 10 year. $750,000 note payable to the seller. e. A dividend of $40,000 was paid to shareholders. f. An investment in Fleet Corp's common stock was made for $120.000 g. New equipment was purchased for $65,000 h. A $90,000 note payable issued three years ago was paid in full 1. A loan for $100,000 was made to one of the company's suppliers. The supplier plans to repay the company this amount plus 10% interest within 18 months. Required: Calculate net cash flows from investing activities. (List cash outflows and any decrease in cash as negative amounts.) Net cash flows

Answer 1

Computation of Cash Flows from Investing Activities

Particulars	$
Building with book value $400,000 was sold for $500,000	500,000
Purchase of it's own common stock as treasury stock at cost of $75,000	(75,000)
Investment in Fleet Corp's common stock	(120,000)
Purchase of new equipment	(65,000)
Cash Flow From Investing Activities	240,000

Notes:

b is a financing activity.

d is an investing activity, but there's no cash outflow.

h and i are both operating activities.