Hardey Corporation's balance sheet and income statement appear below: Cash dividends were $8. The company sold equipment for $13 that was originally purchased for $8 and that had accumulated depreciation of $8.
-The net cash provided by (used by) investing activities for the year was:
A) ($96)
B) ($83)
C) $83
D) $13

Question

Hardey Corporation's balance sheet and income statement appear below:   Cash dividends were $8. The company sold equipment for $13 that was originally purchased for $8 and that had accumulated depreciation of $8.
-The net cash provided by (used by) investing activities for the year was:
A) ($96) 
B) ($83) 
C) $83 
D) $13

Quizplus · Accepted Answer

To calculate the net cash provided by (used by) investing activities, we need to look at the cash flow from the sale of equipment and subtract the original cost and accumulated depreciation of the equipment.

Sale of equipment = $13
Original cost of equipment = $8
Accumulated depreciation = $8
Net cash from sale of equipment = $13 - $8 - $8 = -$3

In addition, we know that the company paid out $8 in cash dividends.

Therefore, the net cash provided by (used by) investing activities for the year was -$3 - $8 = -$11.

This means that the best choice is B, ($83), as it's the only option that reflects a negative cash flow from investing activities.

Hardey Corporation's Balance Sheet and Income Statement Appear Below