In 2019, BayKing Company sold used equipment for $20,000. The equipment had an original cost of $80,000 and accumulated depreciation as of the date of sale was $60,000. BayKing also purchased held-to-maturity securities for $5,000. Net income for the year was $74,000. There were no other transactions conducted during the period. What are the net investing cash flows for BayKing?

Question

Quizplus · Accepted Answer

The net investing cash flows are calculated by considering the cash inflows and outflows from investing activities. The sale of equipment generated a cash inflow of $20,000. The purchase of held-to-maturity securities resulted in a cash outflow of $5,000. Therefore, the net investing cash flow is $20,000 (inflow) - $5,000 (outflow) = $15,000.

In 2019, BayKing Company Sold Used Equipment for $20,000