Question

The following is cash flow data for Rocket Transport: Cash dividend $ 98,000 Purchase of bus $ 18,000 Interest paid on debt $ 25,000 Sales of old equipment $ 45,000 Repurchase of stock $ 127,000 Cash payments to suppliers $ 125,000 Cash collections from customers $ 480,000 a. Find the net cash provided by or used in investing activities. (Input the amount as positive value.) b. Find the net cash provided by or used in financing activities. (Input the amount as positive value.)

Answer 1

Net Cash flow from Investing activities $27,000

Net Cash flow from Financing activities ($250,000)

Step-by-step explanation:

a.

All the cash flows related to the fixed asset is called cash flows from the investing activities. Cash inflows from the sale fixed asset and cash outflows from the purchase of fixed assets are included in it.

Purchase of bus ($18,000)

Sales of old equipment $45,000

Net Cash flow from Investing activities $27,000

b.

Cash flow from financing activities is the cash inflows and outflows related to the fund of the business.

Cash dividend ($98,000)

Repurchase of stock ($127,000)

Interest paid on debt ($25,000)

Net Cash flow from Financing activities ($250,000)

Answer 2

a. Net cash flows from investing activities $27,000

b. Net cash flows from investing activities ($225,000)

Step-by-step explanation:

Rocket Transport

Statement of cash flows (extract)

Purchase of vehicle ($18,000)

Proceeds from disposal of equipment $45,000

Net cash flows from investing activities $27,000

Dividend paid ($98,000)

Repurchase of stock ($127,000)

Net cash flows from investing activities ($225,000)

Note that interest paid, cash payments to suppliers and cash collections from customers affect the net cash flows from operating activities.