Question

Cash Flow from Investing Activities Instructions Amount Descriptions and Labels Statement of Cash Flows (Partial) Conceptual Connection Statement of Cash Flows (Partial) Instructions During 20X1. Craig Company had the following transactions: A Purchased $200,500 of 10-year bonds issued by Makenzie Inc. 1. Prepare the net cash from investing activities section of the statement of cash flow (Note: Use a mission to indicate any decreases in cash or cash outlows. Reler lo the Amount Descriptions Not provided for the exact wording of the answer choices to text entries.) B. Acquired land valued at $69,200 in exchange for machinery. C. Sold equipment with original cost of $530,700 for $330,100; accumulated depreciation taken on the equipment to the point of sale was $179.700. D. Purchased new machinery for $120,300. E. Purchased common stock in Lemmons Company for $55,800 Conceptual Connection 2. Usually, the net cash from investing activities is negative. How Craig cover this negative cash flow What other information would you like to have to make this decision? Complete the items below thai outline a response to the questions posed above. Required: The negative cash flow from investing activities can be covered by using cash from 1. Preprive the nel cash from investing activities section of the statement of cash flows. 2. CONCEPTUAL CONNECTION Usually, the net cash from investing activities is negative. How can Craig cover this negative cash flow? What other information would you like to have to make this decision? Some of the activities listed below would provide cash for investment. Check all that aply Amount Descriptions and Labels Amount Descriptions Labels Land in exchange for machinery Cash flows from financing activities issuing bonds Net cash from investing activities Cash flows from investing activities declaring a dividend Purchase of bonds Noncash investing activity CCCC taking out mortgages Purchase of common stock Purchase of new machinery repurchasing common stock Sale of equipment Dr Most

Answer 1

A Cash flow statement provides the following information:

1) Information about company's cash receipt and cash payment during an accounting period.

2) Information about company's operating, investing and financing activities.

3) Information access the company's liquidity, solvency and financing flexibility.

Cash flow from operating activities (CFO), consists of the inflows and outflows of cash resulting from transactions that affect a firm's net income.

Cash flow from investing activities (CFI) consists of the inflow and outflows of cash resulting from the acquisition of long term assets and investment.

Cash Flow from financing activities (CFF) consists of the inflow and outflows of cash resulting from transactions affecting a firm's capital structure.

Craig Company Statement of Cash Flows (Partial) Cash Flows from Investing activities Sale of Equipment $330,100 Purchase of New Machinery ($120,300) Net Cash from Investing Activities $209,800 Non Cash Investing Activities Land in exchange of machinery $69,200 The negative cash from investing activities can be covered by using cash from Cash Flow from financing activities. Activities that would provide cash investment are Issuing Bond Taking out Mortgages