A company had the following cash flows for the year:
(a)Purchased land,$60,000
(b)Borrowed from a local bank,$100,000
(c)Paid employee salaries,$50,000
(d)Issued common stock,$75,000
(e)Paid dividends,$20,000
(f)Sold equipment,$40,000
(g)Sold services to customers,$120,000
What amount would be reported for net investing cash flows on the Statement of Cash Flows?
A)($20,000).
B)$70,000.
C)$155,000.

Question

A company had the following cash flows for the year: 
(a)Purchased land,$60,000
(b)Borrowed from a local bank,$100,000
(c)Paid employee salaries,$50,000
(d)Issued common stock,$75,000
(e)Paid dividends,$20,000
(f)Sold equipment,$40,000
(g)Sold services to customers,$120,000
What amount would be reported for net investing cash flows on the Statement of Cash Flows?
A)($20,000).
B)$70,000.
C)$155,000.

Quizplus · Accepted Answer

Net investing cash flows include cash flows related to the purchase and sale of long-term assets and investments. Here, purchasing land for $60,000 is an outflow, and selling equipment for $40,000 is an inflow. Therefore, net investing cash flows = -$60,000 + $40,000 = -$20,000.

A Company Had the Following Cash Flows for the Year