Flow Company has provided the following information for the year ended December 31, 2014: • Cash paid for interest, $20,000
• Cash paid for dividends, $6,000
• Cash dividends received, $4,000
• Cash proceeds from bank loan, $29,000
• Cash purchase of treasury stock, $11,000
• Cash paid for equipment purchase, $27,000
• Cash received from issuance of common stock, $37,000
• Cash received from sale of land with a $32,000 book value, $25,000
• Acquisition of land costing $51,000 in exchange for preferred stock issuance
• Payment of a $100,000 note payable by exchanging used machinery with a $77,000 book value and $100,000 fair value
How much was Flow's net cash flow from investing activities?
A) A net outflow of $2,000.
B) A net inflow of $2,000.
C)A net outflow of $53,000.
D)A net inflow of $49,000.

Question

Quizplus · Accepted Answer

Net cash flow from investing activities includes cash flows from the purchase and sale of long-term assets. Cash paid for equipment purchase is an outflow of $27,000, and cash received from the sale of land is an inflow of $25,000. Therefore, the net cash flow from investing activities is $25,000 - $27,000 = -$2,000 (a net outflow of $2,000).

Flow Company Has Provided the Following Information for the Year