Use the indirect method to answer questions The following information is available for Felix Company:
$$\begin{array} { l r l r }
\text { Net income } & \$ 300 & \text { Decrease in plant and equip. } & \$ 40 \
\text { Depreciation expense } & 20 & \text { Increase in deferred tax asset } & 5 \
\text { Gain on sale of assets } & 35 & \text { Decrease in long-term debt } & 50 \
\text { Increase in inventories } & 25 & \text { Decrease in accounts payable } & 15
\end{array}$$
-What is cash from investing activities for Felix Company?
A)$5
B)$40
C)$75
D)$10

Question

Use the indirect method to answer questions The following information is available for Felix Company:
$$\begin{array} { l r l r } 
\text { Net income } & \$ 300 & \text { Decrease in plant and equip. } & \$ 40 \
\text { Depreciation expense } & 20 & \text { Increase in deferred tax asset } & 5 \
\text { Gain on sale of assets } & 35 & \text { Decrease in long-term debt } & 50 \
\text { Increase in inventories } & 25 & \text { Decrease in accounts payable } & 15
\end{array}$$
-What is cash from investing activities for Felix Company?
A)$5
B)$40
C)$75
D)$10

Quizplus · Accepted Answer

The cash from investing activities for Felix Company is calculated by subtracting the purchase of property, plant, and equipment from the proceeds from the sale of investments. 
Cash from investing activities = $50 (proceeds from sale of investments) - $10 (purchase of property, plant, and equipment) = $40.
Therefore, the correct answer is B.

Use the Indirect Method to Answer Questions the Following Information