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Chandler Company’s net income last year was $98,000 and cash dividends declared and paid to the company stockholders was $13,000. Changes in selected balance sheet accounts for the year appear below:
| Increases | |
| (Decreases) | |
| Debit balances: | |
| Cash | $ (3,000) |
| Accounts receivable | 1,000 |
| Inventory | (1,000) |
| Prepaid expenses | 13,000 |
| Long-term investments | 70,000 |
| Plant and equipment | 45,000 |
| Credit balances: | |
| Accumulated depreciation | 61,000 |
| Accounts payable | (11,000) |
| Accrued liabilities | (9,000) |
| Taxes payable | 9,000 |
| Bonds payable | (50,000) |
| Common stock | 40,000 |
| Retained earnings | 85,000 |
The net cash flows from investing activities to be reported in a statement of cash flows is:
a.$75,000.
b.$(115,000).
c.$(75,000).
d.$115,000.
Expert Answer
| b.$(115,000). | ||
| Statement of Cash Flow | ||
| Particulars | Amount | Total Amount |
| Cash flow from Investing activities | ||
| Increase in Long term investment | (70,000.00) | |
| Purchase of PPE | (45,000.00) | |
| Cash flow from Investing activities | (115,000.00) |
