Question

Kilgore Company experienced the following events during its first accounting period:

A. Issued common stock for $5,000.
B. Earned $3,000 of cash revenue.
C. Paid $4,000 cash to purchase land.
D. Paid cash dividends amounting to $400.
E. Paid $2,200 of cash expenses.
F. Based on this information, the amount of cash flow from investing activities appearing on the Statement of Cash Flows is:

Answer 1

The cash flow from investing activities is $4,000, determined by the cash paid to purchase land, which is reported in the investing section of the Statement of Cash Flows.

Step-by-step explanation:

The amount of cash flow from investing activities appearing on the Statement of Cash Flows is $4,000. This figure comes from the cash paid to purchase land during the first accounting period. Investing activities on the Statement of Cash Flows typically include the purchase and sale of long-term investments such as property, plant, and equipment, as well as securities. Therefore, only event C, which involves the purchase of land, impacts the investing activities section.