During 2018,Gillespie Corporation made a loan of $155,000 to a major customer.By the end of 2018 the customer had paid back $60,000 of the loan plus interest of $12,000.In the statement of cash flows for 2018,Gillespie Corporation would report:

Question

Quizplus · Accepted Answer

The loan made by Gillespie Corporation is classified as an investing activity, so the initial outflow of cash was $155,000. When the customer paid back $60,000 plus $12,000 interest, Gillespie received a total of $72,000, which is a reduction of the cash used for investing activities. Therefore, the net cash used for investing activities would be $155,000 - $72,000 = $83,000. The interest received is classified as an operating activity, so there was a cash provided from operating activities of $12,000. Adding these together, the statement of cash flows for 2018 would report a net cash used for investing activities of $83,000 and a cash provided from operating activities of $12,000, for a total net decrease in cash and cash equivalents of $95,000 ($83,000 + $12,000 = $95,000). Therefore, choice C is the correct answer.

During 2018,Gillespie Corporation Made a Loan of $155,000 to a Major