The amount to be shown on the cash flow statement as net cash provided by investing activities would total what amount?

Question

Quizplus · Accepted Answer

To calculate the net cash provided by investing activities, we need to subtract the cash used for investing activities from the cash received from investing activities. Cash used for investing activities = purchase of land ($300,000) + purchase of equipment ($750,000) = $1,050,000. Cash received from investing activities = proceeds from sale of land ($75,000) + proceeds from sale of long-term investments ($900,000) = $975,000. Therefore, net cash provided by investing activities = Cash received from investing activities – Cash used for investing activities = $975,000 - $1,050,000 = -$75,000. However, since this is a negative amount, it should be presented as an amount in parentheses, i.e. ($75,000).

The Amount to Be Shown on the Cash Flow Statement