Sale of short-term stock investments $8,500
Cash collections from customers 21,300
Purchase of used equipment 6,600
Depreciation expense 2,700
Compute cash flows from investing activities using the above company information. (Amounts to be deducted should be indicated by a minus sign.)
Cash Flow Statement:
The cash flow statement is prepared for operating activities, investing activities, and financing activities. The cash flow from investing and financing activities are prepared under the direct method only.
Answer and Explanation:
The net cash flows from investing activities is $1,900.
Explanation: The net cash flows from investing activities is $1,900 ($8,500 - $6,600), which has been computed by deducting the cash used in purchasing used equipment from the cash received from the sale of short-term investment.
Note: cash collection from customers is an operating activity and depreciation expense is a non-cash operating expense.
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Accounting 101: Financial AccountingChapter 12 / Lesson 5