Question

Keyser Beverage Company reported the following items in the most recent year. Net Income: $20,000 Dividends Paid: $15,000 Increase in Accounts Receivable: $10,000 Increase in Accounts Payable: $7,000 Purchase of Equipment: $9,000 Depreciation Expense: $4,000 Issue of Notes Payable: $22,000. Compute net cash from investing activities?

Answer 1

The net cash from investing activities for Keyser Beverage Company is the purchase of equipment totaling $9,000, which is a cash outflow.

Step-by-step explanation:

To compute net cash from investing activities, we need to consider the items that affect the cash flow related to investments. In this case, the only item that is relevant is the purchase of equipment, which represents an outflow of cash. The purchase of equipment is included in the investing activities section of the statement of cash flows. Therefore, the net cash from investing activities in this scenario would be -$9,000.

To compute the net cash from investing activities for Keyser Beverage Company, we need to consider all the transactions that pertain to investments like purchasing equipment and the sales of assets, but not operational or financing activities. Here, the only investing activity listed is the purchase of equipment, which is an outflow of cash. Hence, the net cash from investing activities is the cash spent on the purchase of equipment, which amounts to $9,000.