Question

Jean’s Vegetable Market had the following transactions during 2017: Issued $50,000 of par value common stock for cash. Repaid a 6-year note payable in the amount of $22,000. Acquired land by issuing common stock of par value $100,000. Declared and paid a cash dividend of $2,000. Sold a long-term investment (cost $3,000) for cash of $8,000. Acquired an investment in IBM stock for cash of $15,000. What is the net cash provided used by investing activities?

Answer 1

Answer:

net cash used by investing activities 7,000

Explanation:

investing activities:

proceeds from sale of investment       8,000

purchase of investment                      (15,000)

net cash used by investing activities 7,000

notes:

While the purhcase of land can be considered an investing activity notice it was paid with stocks not cash so it is ignored in the cash flow statement.

Same occurs with the gain on the investment as we have the atention on cash movement we record the cash inflow for 8,000 regardless of the amount loss or earned in the transaction.

The stock related transactions and the cash dividends are part of the financing activities.