Question

The following data are available for Alamo Corporation: Sale of land $225,000 Sale of equipment 130,000 Issuance of common stock 140,000 Purchase of vehicle 70,000 Payment of cash dividends 120,000 Based on the above, net cash provided by investing activities is Select one: a. $145,000. b. $305,000. c. $ 25,000. d. $285,000. e. $425,000.

Answer 1

Answer:

Option D,$285,000 is the correct one

Explanation:

The net cash provided by investing activities can be computed thus:

Sale of land                  $225,000

Sale of equipment        $130,000

Purchase of vehicle     ($70,000)

Net cash provided         $285,000

The issuance of common stock with proceeds of $140,000 is a financing activity as well as payment of dividends of $120,000.

The only items relating to investing activities are the ones highlighted in the computation above

Hence,the correct option is D,$285,000

Answer 2

Answer:

d. $285,000

Explanation:

All the cash flows related to the fixed asset is called cash flows from the investing activities. Cash inflows from the sale fixed asset and cash outflows from the purchase of fixed assets are included in it.

Cash Flow from Investing Activities

Cash Inflows

Sale of Land                 $225,000

Sale of Equipment       $130,000

Total Cash inflows                           $355,000

Cash out flows

Purchase of Vehicle                        ($70,000)

Net Cash Flows                                $285,000

Other Cash flows are from non-investing activities.