For the year ended December 31,2016,Fields Company made cash payments of $50,000 for dividends,paid interest of $20,500,paid $30,000 cash to suppliers,and purchased equipment for $64,000 cash.The amount of cash used by investing activities for 2016 is:
A)$114,000.
B)$64,000.
C)$20,500.
D)$134,500.

Question

Quizplus · Accepted Answer

The cash used by investing activities is the sum of all cash payments for long-term assets. In this case, the only cash payment for a long-term asset is the purchase of equipment for $64,000. Therefore, the amount of cash used by investing activities for 2016 is $64,000. The other cash payments (dividends, interest, and payments to suppliers) are either financing or operating activities.

For the Year Ended December 31,2016,Fields Company Made Cash Payments