Question

Silver Trading Corp. recorded a net income of $200,000 for the year 2021. For the same period, the company purchased land for $150,000. It sold some of its long term investments for $50,000 during the period. The company also recorded a depreciation of $10,000 on its equipment.

Considering the above transactions, Silver's net cash flows from investing activities for the year would be an:

A) inflow of $200,000.
B) inflow of $50,000.
C) outflow of $100,000.
D) outflow of $150,000.

Answer 1

C) outflow of $100,000

Step-by-step explanation:

Given the following information about Silver Trading Corp.;

net income = $200,000

purchased land = $150,000

sale of long term investments = $50,000

depreciation = $10,000

To determine Silver's net cash flows from investing activities for the year

The only elements of investing activities in the information given are an outflow of $150,000 for the purchase of land and an inflow of $50,000 from the sale of long term investments.

Therefore, net cash flows from investing activities for the year

= -$150,000 + $50,000

= -$100,000

A net outflow of $100,000.