EBK ESSENTIALS OF INVESTMENTS
EBK ESSENTIALS OF INVESTMENTS
10th Edition
ISBN: 8220102800267
Author: Bodie
Publisher: YUZU
Question
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Chapter 14, Problem 2PS
Summary Introduction

Requirement-a:

To calculate:

The Net cash provided by or used in investing activities

Introduction:

Cash Flow statement:

The Cash flow statement shows the movement of cash during a particular period. The Cash flows are categorized into three categories as follows:

  • Cash flows from operating activities
  • Cash Flows from investing activities
  • Cash flows from financing activities

(Note: Cash flows from operating activities can be prepared using direct or indirect method)

Expert Solution
Check Mark

Answer to Problem 2PS

The Net cash provided by investing activities is $39,000

Explanation of Solution

The Net cash provided by or used in investing activities is explained as follows:

    Cash Flow From Investing Activities:
    Purchase of Bus $ (33,000)
    Sale of old equipment $ 72,000
    Cash Provided by Investing Activities $ 39,000
Summary Introduction

Requirement-b:

To calculate:

The Net cash provided by or used in financing activities

Introduction:

Cash Flow statement:

The Cash flow statement shows the movement of cash during a particular period. The Cash flows are categorized into three categories as follows:

  • Cash flows from operating activities
  • Cash Flows from investing activities
  • Cash flows from financing activities

(Note: Cash flows from operating activities can be prepared using direct or indirect method)

Expert Solution
Check Mark

Answer to Problem 2PS

The Net cash used in financing activities is $160,000

Explanation of Solution

The Net cash provided by or used in financing activities is explained as follows:

    Cash Flow From Financing Activities:
    Cash Dividend $ (80,000)
    Interest Paid on Debt $ (25,000)
    Repurchase of stock $ (55,000)
    Cash used in Financing Activities $(160,000)
Summary Introduction

Requirement-c:

To calculate:

The Net increase or decrease in cash for the year

Introduction:

Cash Flow statement:

The Cash flow statement shows the movement of cash during a particular period. The Cash flows are categorized into three categories as follows:

  • Cash flows from operating activities
  • Cash Flows from investing activities
  • Cash flows from financing activities

(Note: Cash flows from operating activities can be prepared using direct or indirect method)

Expert Solution
Check Mark

Answer to Problem 2PS

The Net increase in cash for the year is $84,000

Explanation of Solution

The Net increase or decrease in cash for the year is explained as follows:

    Cash Flow From Operating Activities:
    Cash Payment to Suppliers $ (95,000)
    Cash collected from Customers $ 300,000
    Cash Provided by Operating Activities $ 205,000
    Cash Flow From Investing Activities:
    Purchase of Bus $ (33,000)
    Sale of old equipment $ 72,000
    Cash Provided by Investing Activities $ 39,000
    Cash Flow From Financing Activities:
    Cash Dividend $ (80,000)
    Interest Paid on Debt $ (25,000)
    Repurchase of stock $ (55,000)
    Cash used in Financing Activities $(160,000)
    Net Increase in Cash for the year $ 84,000

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