Question

In preparing Ivanhoe Company’s statement of cash flows for the year ended December 31, 2018, Collect note receivable $621000 Issue bonds payable 630000 Purchase treasury stock 304000 What amount should be reported on Ivanhoe Company’s statement of cash flows for investing activities? $317000 $326000 $621000 $1251000

Answer 1

$326,000

Step-by-step explanation:

The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.

The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.

The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.

Collect note receivable $621000- Investing activity (inflow)

Issue bonds payable 630000 - Financing activity (inflow)

Purchase treasury stock 304000 - Financing activity (outflow)

Hence cash flows for investing activities

= $630,000 - $304,000

= $326,000

Answer 2

$326000

Step-by-step explanation:

From the question, both Issue bonds payable and Purchase treasury stock are investing activities. While Issue bonds payable will add to the cash flows, Purchase treasury stock will remove from the cash flows. Therefore, we have:

Cash flow from investing activities = $630,000 - $304,000 = $$326,000

Therefore, Ivanhoe Company should report $326,000 in its statement of cash flows for investing activities.