Question

Modern Movables Corporation is a Virginia-based manufacturer of furniture. In a recent quarter, it reported the following activities:

Net income $4,435
Purchase of equipment 901
Borrowings under line of credit (bank) 1,447
Proceeds from issuance of common stock 14
Cash received from customers 29,464
Payments to reduce notes payable (long-term) 49
Sale of investments 137
Proceeds from sale of equipment 6,894
Dividends paid 280
Interest paid 93

Required:
Based on this information, present the cash flows from investing and financing activities sections of the cash flow statement. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Answer:

Modern Movables Corporation

Statement of cash flows

Cash flows from investing activities:

Proceeds from sale of equipment                     $6,894

Purchase of equipment                                        ($901)

Sale of investments                                                $137

Net cash from investing activities                      $6,130

Cash flows from financing activities:

Proceeds from issuance of common stock             $14

Borrowings under line of credit (bank)               $1,447

Payments to reduce notes payable                      ($49 )

Dividends paid                                                    ($280 )

Net cash from financing activities                       $1,132