Combining the following information, compute the total amount of (1) cash flow f
ID: 2503760 • Letter: C
Question
Combining the following information, compute the total amount of (1) cash flow from investing activities and (2) cash flow from financing activities. A. Purchased a building for $120,000. Paid $40,000 and signed a mortgage with the seller for the remaining $80,000. B. Executed a debt-equity swap: replaced a $67,000 loan by giving the lender shares of common stock worth $67,000 on the date the swap was executed. C. Purchased land for $100,000. Signed a note for $35,000 and gave shares of common stock worth $65,000. D. Borrowed $56,000 under a long-term loan agreement. Used the cash from the loan proceeds as follows: $15,000 for purchase of additional inventory, $30,000 to pay cash dividends, and $11,000 to increase the cash balance. Enter cash inflows as positive amounts, and enter cash outflows as negative amounts.Explanation / Answer
Investing activities = -40000
Financing activities = 56000 - 30000
$80000 signed mortage will not be considered as there is not cash transaction
Debt equity swap will not come in cash flows as there is no exchange of cash
Land purchased of $100000 will not be considered as no cash exchanged hands.
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