The following transactions apply to X Company: What is the net effect of these t

Question

The following transactions apply to X Company:

What is the net effect of these transactions in the Investing Section of the Statement of Cash Flows (assume that a positive number means a net inflow and a negative number means a net outflow)?

Sold merchandise for cash $2,119 Paid wages 3,377 Purchased new equipment for cash 8,948 Paid dividends 1,423 Bought supplies on account 4,310 Paid operating expenses 5,646 Issued stock to investors for cash 1,631 Repaid a bank loan 4,924 Disposed of old equipment for cash 6,456 Loaned money to another company 3,599 Recorded depreciation during the year 1,203

Explanation / Answer

In investing activities following will come:

Disposed of old equipment for cash - Purchased new equipment for cash - Loaned money to another company= 6456- 8948- 3599= - 6091

Net outflow of $6091 under investing activities section.

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