Question

Mobile Video Systems sold land, investments, and issued their own common stock for $11 million, $16 million, and $21 million, respectively. Mobile Video also purchased treasury stock, equipment, and a patent for $1 million, $2 million, and $4 million, respectively.

(a) What amount should the company report as net cash flows from investing activities? (Negative value should be indicated by minus sign. Enter your answer in millions.)
(b) What amount should the company report as net cash flows from financing activities? (Negative value should be indicated by minus sign. Enter your answer in millions.)

Answer 1

a. $21 million

b. $20 million

Step-by-step explanation:

a. Cash flow from Investing activities

Sale of land $11 million

Sale of investments $16 million

Purchase of equipment -$2 million

Purchase of patent -$4 million

Net Cash flow from Investing activities $21 million

b. Cash flow from Financing activities

Issue of common stock $21 million

Purchase of treasury stock -$1 million

Net Cash flow from Financing activities $20 million