Question

Mobile Video Systems sold land, investments, and issued their own common stock for $11 million, $15 million, and $21 million, respectively. Mobile Video also purchased treasury stock, equipment, and a patent for $2 million, $2 million, and $5 million, respectively.

(a) What amount should the company report as net cash flows from investing activities? (Enter your answer in millions. Omit the "$" sign in your response.)
(b) What amount should the company report as net cash flows from financing activities? (Enter your answer in millions. Omit the "$" sign in your response.)

Answer 1

Step-by-step explanation:

Investing activities are defined as:

The acquisition and disposal of long term assets and other investments not included in cash equivalents.

Cash flows from investing activities are those that involve buying and selling long term assets. They reflect how much of the entity’s cash was invested with the purpose of generating future cash flows. An outflow must result ing an asset being recognised in the statement of financial position, for it to be classified as an investing activity.

amount should the company report as net cash flows from investing activities :

Cash received from disposals

Cash received from disposal of Land 11

Cash received from disposal of Investment 15

investment in stock -2

Purchased Equipment -2

purchased Patents -5

Net cash genrated from investing Acyivities 17

Financing activities result in:

Changes in size; composition of the contributed equity and borrowings of the entity.

Cash flows from financing activities are those that involve the entity’s equity and borrowings. The net cash flows from financing activities reflect to what extent third parties may make claims on the cash resources of the entity

B)amount should the company report as net cash flows from financing activities :

Issuance of Stock 21

Net cash genrated from Financing Acyivities 21