Question

Ivanhoe Corporation had the following activities in 2020. 1. Sale of land $195,000 4. Purchase of equipment $446,000 2. Purchase of inventory $760,000 5. Issuance of common stock $302,000 3. Purchase of treasury stock $73,000 6. Purchase of available-for-sale debt securities $54,000 Compute the amount Ivanhoe should report as net cash provided (used) by investing activities in its 2020 statement of cash flows. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Ivanhoe Corporation

Cash flows from investing activities:

Cash proceeds from sale of land $195,000

Purchase of equipment ($446,000)

Purchase of AFS securities ($54,000)

Total cash flow from investing activities ($305,000)

Step-by-step explanation:

1. Sale of land $195,000 ⇒ INVESTING ACTIVITY

2. Purchase of inventory $760,000 ⇒ OPERATING ACTIVITY

3. Purchase of treasury stock $73,000 ⇒ FINANCING ACTIVITY

4. Purchase of equipment $446,000 ⇒ INVESTING ACTIVITY

5. Issuance of common stock $302,000 ⇒ FINANCING ACTIVITY

6. Purchase of available-for-sale debt securities $54,000 ⇒ INVESTING ACTIVITY