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) |