Question

Master Company's net income last year was $88,000, and cash dividends declared and paid to the company stockholders was $60,000. Changes in selected balance sheet accounts for the year are as follows: Increases (Decreases) Debit balances: Cash $ (4,000) Accounts receivable (11,000) Inventory 6,000 Prepaid expenses 0 Long-term investments 50,000 Plant and equipment 35,000 Credit balances: Accumulated depreciation 62,000 Accounts payable 1,000 Accrued liabilities (5,000) Taxes payable 10,000 Bonds payable (60,000) Common stock 40,000 Retained earnings 28,000 The net cash flows from investing activities last year were: a. $85,000. b. $(45,000). c. $(85,000). d. $45,000.

Answer 1