During 2010, Gillespie Corporation made a loan of $155,000 to a major customer. By the end of 2010 the customer had paid back $60,000 of the loan plus interest of $12,000. In the statement of cash flows for 2010, Gillespie Corporation would report:
A) A net decrease in cash and cash equivalents of $72,000 for 2010.
B) $72,000 net cash used for investing activities.
C) $95,000 net cash used for investing activities, and $12,000 cash provided from operating activities.
D) $155,000 net cash used for investing activities, and $72,000 net cash provided by financing activities.

Question

Quizplus · Accepted Answer

The loan of $155,000 is an investing activity, and the repayment of $60,000 reduces the net cash used for investing activities to $95,000. The interest received of $12,000 is considered cash provided from operating activities.

During 2010, Gillespie Corporation Made a Loan of $155,000 to a Major