Question

The following events occurred last year at Dorder Corporation:

Purchase of plant and equipment	$20,000
Sale of long-term investment	$8,000
Dividends received on long-term investments	$5,000
Paid off bonds payable	$11,000
Depreciation expense	$6,500

Based on the above information, the cash provided (used) by investing activities for the year on the statement of cash flows would net to:

$(11,000)

$(12,000)

$(24,500)

$(6,500)

Last year Burch Corporation's cash account decreased by $16,000. Net cash provided by investing activities was $7,100. Net cash used in financing activities was $14,000. On the statement of cash flows, the net cash flow provided by (used in) operating activities was:

$6,900

$(16,000)

$(9,100)

$(22,900)

McCorey Corporation recorded the following events last year:

Repurchase by the company of its own common stock	$39,000
Sale of long-term investment	$58,000
Interest paid to lenders	$14,500
Dividends paid to the company's shareholders	$68,000
Collection by McCorey of a loan made to another company	$44,000
Payment of taxes to governmental bodies	$24,500

On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities.

Based solely on the information above, the net cash provided by (used in) investing activities on the statement of cash flows would be:

$102,000

$(9,500)

$34,000

$(19,500)

Financial statements of Rukavina Corporation follow:

Rukavina Corporation Comparative Balance Sheet
	Ending Balance	Beginning Balance
Assets:
Cash and cash equivalents	$24	$21
Accounts receivable	77	72
Inventory	33	31
Property, plant and equipment	528	480
Less: accumulated depreciation	326	299
Total assets	$336	$305
Liabilities and stockholders' equity:
Accounts payable	$42	$52
Bonds payable	95	110
Common stock	71	72
Retained earnings	128	71
Total liabilities and stockholders' equity	$336	$305

Income Statement
Sales	$705
Cost of goods sold	448
Gross margin	257
Selling and administrative expenses	151
Net operating income	106
Income taxes	38
Net income	$68

Cash dividends were $11. The company did not dispose of any property, plant, and equipment. It 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 activities for the year was:

$1

$(11)

$(15)

$(48)

Answer 1

1.Net cash used (provided) by investing activities - Dorder corporation :

Purchase of plant and equipment	($20000)
Sale of long term investment	$8000
Net cash used in investing activities	($12000)

So correct option is $(12,000)

2.Net cash flow provided by (used in) operating activities -Burch corporation :

Net cash decrease	($16000)
Net Cash provided by Investing Activities	$7100
Net cash used in financing activities	($14000)
Balance cash used by operating activities	($9100)

Note : Net change in cash = Net cash flow provided by (used in) operating activities + Net Cash provided by (used in ) Investing Activities + Net cash provided by (used) in financing activities

-$16000 =  Net cash flow provided by (used in) operating activities + $7100 - $14000

Net cash flow provided by (used in) operating activities = -$7100 + $14000 - $16000 = -$9100

So correct option is $(9,100)

3.Net cash provided by (used in) investing activities - McCorey Corporation:

Sale of long term investments	$58000
Collection of loan made to another company	$44000
Net cash provided by investing activities	$102000

So correct option is $102,000

4. Net cash provided by (used in) investing activities- Rukavina Corporation:

Purchase of property, plant and equipment ( 528-480)	($48)
Net cash used by investing activities	($48)

So correct option is $(48)