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The following information is related to Alpha Company’s fiscal year 2017. Income Statement: Net Income $3,000,000 Depreciation Expense 500,000 Gain on Sale of Plant Assets 50,000 Interest Expense 5,000 Balance Sheet – 12/31/17: Increase (Decrease) Accounts Payable ($40,000) Plant Assets – Purchased 250,000 Plant Assets – Disposals (100,000) Additional Information: Common Stock exchanged for outstanding Long Term Notes Payable of $125,000 Dividends paid were $30,000 Use this information to determine Alpha Company’s Net Cash Flows from Investing Activities. If the amount is an outflow then enclose the amount with dollar sign inside of brackets ( ):
Expert Answer
| CASH FLOW FROM INVESTING ACTIVITIES | |||
| Purchase of plant asset | ($250,000) | ||
| Disposal of assets | $100,000 | ||
| Net Cash flow from investing activities | ($150,000) | ||
| Net Income,Depreciation,Gain on sale of plant,Interest | |||
| expenses are part of cash flows from Operating activities | |||
| There is no cash flow involved in exchange of common stock | |||
| Cash flow from common stock and loans are part of financing | |||
| activities.Dividend cash flow is part of financing activities | |||
