Question

During the month of August, the Boyce Company had the following transactions:

-Revenues of $120,000 were earned and received in cash.
- Bank loans of $18,000 were paid off
-Equipment of $40,000 was purchased with cash.
-Expenses of $73,600 were paid.
-Stockholders purchased additional shares for $44,000 cash.
A statement of cash flows for August, would report net cash flows from investing activities of:

Answer 1

The net cash flows from investing activities for Boyce Company during the month of August would be negative $40,000, given they only purchased equipment worth that amount.

Step-by-step explanation:

The question asks to calculate the net cash flows from investing activities for Boyce Company for the month of August. In accounting, investing activities include transactions involving the purchase and sale of long-term assets and investments. To determine the net cash flow from investing activities, we must consider only transactions that fall into this category, which for Boyce Company includes the purchase of equipment.

In this case, Boyce Company purchased equipment worth $40,000 with cash. There were no sales of equipment or investments, so the net cash flows from investing activities would be negative $40,000, which represents the cash outflow for the purchase of the equipment.