Question

Dristell Inc. had the following activities during the year (all transactions are for cash unless stated otherwise):A building with a book value of $400,000 was sold for $500,000.Additional common stock was issued for $160,000.Dristell purchased its own common stock as treasury stock at a cost of $75,000.Land was acquired by issuing a 6%, 10-year, $750,000 note payable to the seller.A dividend of $40,000 was paid to shareholders.An investment in Fleet Corp.’s common stock was made for $120,000.New equipment was purchased for $65,000.A $90,000 note payable issued three years ago was paid in full.A loan for $100,000 was made to one of Dristell’s suppliers. The supplier plans to repay Dristell this amount plus 10% interest within 18 months.Required:Calculate net cash flows from investing activities.

Answer 1

Answer:

cash flow used from investing activities              215,000

Explanation:

Investing activities

proceed from sale of building    500,000

Investment Fleet Corp.               (120,000)

Equipment purchased                 (65,000)

loan to suppliers                         (100,000)

cash flow used

from investing activities              215,000

The common stock and dividend are financing

The land was acquire with a note payable, it do not involve cash.

the loan is made by the company to a supplies, it will be returned with interest, not goods, so is investing.