Question

Based on the following information, compute cash flows from investing activities under GAAP.
Cash collections from customers $ 880
Purchase of used equipment 240
Depreciation expense 240
Sale of investments 530
Dividends received 120
Interest received 240
Cash Flows from Investing Activities ____________

Answer 1

Answer:

$240

Explanation:

The computation of the cash flows from investing activities is shown below:

Cash flow from investing activities

Purchased of used equipment -$240

Sale of investment $480

Cash flow provided by investing activities $240

The purchase of used equipment is a cash outflow therefore it is represented in a negative sign while on the other hand sale of investment is cash inflow so the same is presented in a positive sign