Purchase of inventory $120,000 Purchase of equipment 80,000 Purchase of availabl

Question

Purchase of inventory

$120,000

Purchase of equipment

80,000

Purchase of available-for-sale securities

60,000

Purchase of treasury stock

70,000

Issuance of common stock

150,000

Dunbarn Co. had the following activities during the year:

Purchase of inventory

$120,000

Purchase of equipment

80,000

Purchase of available-for-sale securities

60,000

Purchase of treasury stock

70,000

Issuance of common stock

150,000

What amount should Dunbarn report as cash provided (used) by investing activities in its statement of cash flows for the year? A. $(120,000) B. $(210,000) C. $150,000 D. $(140,000)

Explanation / Answer

Choice “D” is correct.

Explanation

Cash flows from investing activities come from transactions involving the purchase or sale of non-current assets. Both equipment and available-for-sale securities purchases are cash flows used by investing activities.

Purchase of equipment $ 80,000

Purchase of Available for sale securities $ 60,000

Total $140,000 Outflow

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.