Use the following information for questions 24-25.
Malcolm Corp.'s statements of financial position at December 31, 2020 and 2019 and information relating to 2020 activities are presented below: Other information relating to 2020 activities:
1. Net income was $ 375,000.
2. Cash dividends of $ 150,000 were declared and paid.
3. Equipment costing $ 250,000, with a book value of $ 80,000, was sold for $ 90,000.
4. A long-term investment was sold for $ 80,000. There were no other transactions affecting long-term investments.
5. 5,000 common shares were issued for $ 25 a share.
6. Temporary investments consist of treasury bills maturing on June 30, 2021.
-The cash used in investing activities in 2020 was
A) $ 580,000.
B) $ 455,000.
C) $ 430,000.
D) $ 420,000.

Question

Use the following information for questions 24-25.
Malcolm Corp.'s statements of financial position at December 31, 2020 and 2019 and information relating to 2020 activities are presented below:  Other information relating to 2020 activities:
1. Net income was $ 375,000.
2. Cash dividends of $ 150,000 were declared and paid.
3. Equipment costing $ 250,000, with a book value of $ 80,000, was sold for $ 90,000.
4. A long-term investment was sold for $ 80,000. There were no other transactions affecting long-term investments.
5. 5,000 common shares were issued for $ 25 a share.
6. Temporary investments consist of treasury bills maturing on June 30, 2021.
-The cash used in investing activities in 2020 was
A) $ 580,000. 
B) $ 455,000. 
C) $ 430,000. 
D) $ 420,000.

Quizplus · Accepted Answer

The cash used in investing activities in 2020 was $580,000. This is calculated by taking the net change in property, plant, and equipment ($455,000) and adding back depreciation and amortization ($125,000).

Use the Following Information for Questions 24-25