Zoum Corporation had the following transactions during 2017:
1. Issued $250,000 of par value common stock for cash.
2. Recorded and paid wages expense of $120,000.
3. Acquired land by issuing common stock of par value $1,000,000.
4. Declared and paid a cash dividend of $20,000.
5. Sold a long-term investment (cost $6,000) for cash of $6,000.
6. Recorded cash sales of $800,000.
7. Bought inventory for cash of $320,000.
8. Acquired an investment in Zynga stock for cash of $42,000.
9. Converted bonds payable to common stock in the amount of $1,000,000.
10. Repaid a 6-year note payable in the amount of $440,000.
What is the net cash provided by investing activities?
A)$864,000.
B)$424,000
C)($36,000).
D)($136,000).

Question

Zoum Corporation had the following transactions during 2017:
1.	Issued $250,000 of par value common stock for cash.
2.	Recorded and paid wages expense of $120,000. 
3.	Acquired land by issuing common stock of par value $1,000,000.
4.	Declared and paid a cash dividend of $20,000. 
5.	Sold a long-term investment (cost $6,000) for cash of $6,000. 
6.	Recorded cash sales of $800,000.
7.	Bought inventory for cash of $320,000.
8.	Acquired an investment in Zynga stock for cash of $42,000.
9.	Converted bonds payable to common stock in the amount of $1,000,000.
10.	Repaid a 6-year note payable in the amount of $440,000.
What is the net cash provided by investing activities?
A)$864,000.
B)$424,000
C)($36,000).
D)($136,000).

Quizplus · Accepted Answer

The net cash provided by investing activities includes cash inflows and outflows related to investments. The only cash transactions related to investing activities are the sale of a long-term investment for $6,000 (inflow) and the purchase of an investment in Zynga stock for $42,000 (outflow). Therefore, the net cash flow from investing activities is $6,000 - $42,000 = ($36,000).

Zoum Corporation Had the Following Transactions During 2017