Timbuktu Industries purchased $90,000 of marketable securities in April, 2017 an
ID: 3198589 • Letter: T
Question
Timbuktu Industries purchased $90,000 of marketable securities in April, 2017 and received dividends of $6,600 in July, 2017. Timbuktu sold the securities in December, 2017, at a gain of $5,600. How would these transactions be reported in Timbuktu statement of cash flows for 2017?
$95,600 cash provided by investing activities; $6,600 cash provided by operating activities
$102,200 cash provided by investing activities
$102,200 cash provided by operating activities
$96,600 cash provided by investing activities; $5,600 cash provided by operating activities
$95,600 cash provided by investing activities; $6,600 cash provided by operating activities
$102,200 cash provided by investing activities
$102,200 cash provided by operating activities
$96,600 cash provided by investing activities; $5,600 cash provided by operating activities
Explanation / Answer
Investing activities include purchases or sales of an asset (assets can be land, building, equipment, marketable securities, etc.)
Cash received from investing activities = 90000 + 5600 = 95600
And cash provided by operating activities = 6600
Option 1 is correct.
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