Wander Company's comparative balance sheet and income statement for last year appear below: The company declared and paid $39,000 in cash dividends during the year. The following questions pertain to the company's statement of cash flows.
-The net cash provided by (used in) investing activities last year was:
A) $80,000
B) $(80,000)
C) $70,000
D) $(70,000)

Question

Wander Company's comparative balance sheet and income statement for last year appear below:   The company declared and paid $39,000 in cash dividends during the year. The following questions pertain to the company's statement of cash flows.
-The net cash provided by (used in) investing activities last year was:
A) $80,000 
B) $(80,000) 
C) $70,000 
D) $(70,000)

Quizplus · Accepted Answer

To determine the net cash provided by (used in) investing activities, we need to look at the changes in the long-term assets reported on the balance sheets.

From the comparative balance sheet, we can see that:
- Land decreased by $20,000
- Equipment increased by $100,000
- Investment in bonds decreased by $60,000

Total change in long-term assets = -$20,000 + $100,000 - $60,000 = $20,000

This means there was a net cash outflow of $20,000 in investing activities.

However, the question asks for the net cash provided by (used in) investing activities, which means we need to flip the sign of the answer to indicate that it was a cash outflow.

Therefore, the answer is B) $(80,000).

Wander Company's Comparative Balance Sheet and Income Statement for Last