During 2014, Gillespie Corporation made a loan of $155,000 to a major customer. By the end of 2014 the customer had paid back $60,000 of the loan plus interest of $12,000. In the statement of cash flows for 2014, Gillespie Corporation would report:

Question

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The loan made to the customer is considered an investing activity, so the initial outflow of cash is $155,000. Then, during 2014, the customer paid back $60,000 of the loan and $12,000 of interest. The repayment of the loan is also an investing activity, so the inflow of cash is $60,000. Therefore, the net cash used in investing activities is $155,000 - $60,000 = $95,000. The interest received is considered cash from operating activities, which would be $12,000. Therefore, the statement of cash flows would report a net cash decrease of $83,000 ($95,000 - $12,000) in investing activities, and a net cash inflow of $12,000 in operating activities.

During 2014, Gillespie Corporation Made a Loan of $155,000 to a Major