Megan Corporation\'s net income last year was $98,000. Changes in the company\'s
ID: 2576590 • Letter: M
Question
Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below: Increases (Decreases Asset and Contra-Asset Accounts: Cash Accounts recelvable $3,000) $14,000) $7000 $80 $55 $58 Prepald expenses Property, plant and equipment Accumulated depreclation Liability and Equity Accounts Accounts payable Accrued llabilitles Income taxes payable Bonds payable Common stock Retained earnings ($11,000 ($30,000 $20 $62,0 The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) Investing activitles last year was: O $115,000 $135,000 O ($135,000 O ($115,000)Explanation / Answer
Megan Corporation its third alternative i.e. -135000 arrived as follow Net Increase in Long term Investment 80000 Net Increase in Property Plant & Equipment 55000 Total 135000 None of the other items affect cash flow of Investing activities All other items belong to either operating or financing activities Accumulated depreciation does not involve any cash flow so answer given above i.e. 3rd alternative is correct