Two years ago,your company bought $40,000 in bonds from another company.This month,it sold half of those bonds for $20,640 and lent $1,000 to an employee with a promissory note.On the statement of cash flows for this accounting period,your company would report a net cash:
A)outflow of $19,640 from investing activities.
B)inflow of $19,640 from investing activities.
C)inflow of $20,640 from investing activities.
D)outflow of $20,640 from investing activities.

Question

Quizplus · Accepted Answer

Buying and selling long-lived assets are investing activities.
Net Cash Flow = inflow - outflow
Net Cash Flow = $20,640 - $1,000
Net Cash Flow = $19,640.

Two Years Ago,your Company Bought $40,000 in Bonds from Another