A review of Jan's Lakeside Resort's statement of cash flows showed the following:$\begin{array}{lr}
\text { Cash flows from operating activities } & 35,000 \
\text { Cash flows from investing activities } & 75,000 \
\text { Cash flows from financing activities } & (125,000)
\end{array}$ From this information,the most likely explanation is that Jan's is

A)using cash from operations and selling long-term assets to pay back debt
B)using cash from operations and borrowing to purchase long-term assets.
C)using its profits to expand growth.
D)using cash from investors to provide for operations.

Question

A review of Jan's Lakeside Resort's statement of cash flows showed the following:$\begin{array}{lr}
\text { Cash flows from operating activities } & 35,000 \
\text { Cash flows from investing activities } & 75,000 \
\text { Cash flows from financing activities } & (125,000)
\end{array}$ From this information,the most likely explanation is that Jan's is

A)using cash from operations and selling long-term assets to pay back debt
B)using cash from operations and borrowing to purchase long-term assets.
C)using its profits to expand growth.
D)using cash from investors to provide for operations.

Quizplus · Accepted Answer

The positive cash flow from operating activities ($35,000) and investing activities ($75,000) indicates that the resort is generating cash through its operations and possibly selling long-term assets. The negative cash flow from financing activities (-$125,000) suggests that the resort is using this cash to pay back debt.

A Review of Jan's Lakeside Resort's Statement of Cash Flows