Question

Flow Company has provided the following information for the year ended December 31, 2014:Cash paid for interest $20,000Cash paid for dividends $6,000Cash dividends received $4,000Cash proceeds from bank loan $29,000Cash purchase of treasury stock $11,000Cash paid for equipment purchase $27,000Cash received from issuance of common stock $37,000Cash received from sale of land with a $32,000 book value $25,000Acquisition of land costing $51,000 in exchange for preferred stock issuance Payment of a $100,000 note payable by exchanging used machinery with a $77,000 book value and $100,000 fair value Required:How much was Flow's net cash flow from investing activities:_________a) A net outflow of $2,000.b) A net inflow of $2,000.c) A net outflow of $53,000.d) A net inflow of $49,000.

Answer 1

The correct option is B,A net inflow of $2,000

Step-by-step explanation:

The net cash flow from investing activities is the cash dividends received minus cash paid for equipment purchase plus cash received from sale of land

Cash dividends received is $4,000

cash paid for equipment purchase is $27,000

Cash received from the sale of land is $25,000

Net cash flow from investing activities=$4000-$27,000+$25,000=$2000

The correct option ,therefore, is B, a net cash inflow of $2000 from investing activities