The following information should be used according to the provisions of GAAP (Statement of Cash flows) and using the following data.
$\begin{array}{lr}
\text { Net income } & \$ 80,000 \
\text { Amortization of goodwill } & 2,000 \
\text { Decrease in accounts receivable } & 2,000 \
\text { Increase in inventory } & 3,000 \
\text { Purchase of marketable securities } & 13,000 \
\text { Sale of land for } \$ 10,000 \text { gain } & 11,000 \
\text { Depreciation expense } & 4,000 \
\text { Repayment of debt } & 8,000 \
\text { Payment of dividend } & 3,000 \
\text { Interest payment } & 2,000
\end{array}$

-What is net cash flow from investing?
A)$11,000
B)$7,000
C)($2,000)
D)($12,000)

Question

The following information should be used according to the provisions of GAAP (Statement of Cash flows) and using the following data.
$\begin{array}{lr}
\text { Net income } & \$ 80,000 \
\text { Amortization of goodwill } & 2,000 \
\text { Decrease in accounts receivable } & 2,000 \
\text { Increase in inventory } & 3,000 \
\text { Purchase of marketable securities } & 13,000 \
\text { Sale of land for } \$ 10,000 \text { gain } & 11,000 \
\text { Depreciation expense } & 4,000 \
\text { Repayment of debt } & 8,000 \
\text { Payment of dividend } & 3,000 \
\text { Interest payment } & 2,000
\end{array}$

-What is net cash flow from investing?
A)$11,000
B)$7,000
C)($2,000)
D)($12,000)

Quizplus · Accepted Answer

To calculate net cash flow from investing activities, we need to add the cash inflow from investing activities and subtract the cash outflow from investing activities. 
Cash inflow from investing activities:
- Sale of land: $17,000
Cash outflow from investing activities:
- Purchase of equipment: ($19,000)
- Purchase of stock: ($10,000)
Net cash flow from investing activities: ($2,000) = $17,000 - $19,000 - $10,000.

The Following Information Should Be Used According to the Provisions