Ford\'s Car Market had the following transactions during 2014: Sold a long-term
ID: 2460074 • Letter: F
Question
Ford's Car Market had the following transactions during 2014:
Sold a long-term investment (cost $3,500) for cash of $6,000.
What is the net cash provided/(used) by investing activities?
Select one:
a. $–2,000
b. $–52,000
c. $–4,500
d. $–78,000
1. Issued $55,000 of par value common stock for cash. 2. Repaid a 6 year note payable in the amount of $26,000. 3. Acquired land by issuing common stock of par value $50,000. 4. Declared and paid a cash dividend of $8,500 5.Sold a long-term investment (cost $3,500) for cash of $6,000.
6. Acquired an investment in IBM stock for cash of $8,000.Explanation / Answer
In cash flow statement, there are three type of activities – Operating, Investing and Financing activity. Investing activity is an item that reports in company cash flow position resulting from gains or loss from amount spent on investment in capital assets.
If there is purchase or investing anything then there is cash outflow and if there is sale then it is cash inflow.
Acquisition of land (50,000)
Sale of long term investment 6,000
Acquired investment in ibm stock (8000)
Cash outflow from investing activity (52,000)