Question

Modern Movables Corporation is a Virginia-based manufacturer of furniture. In a recent quarter, it reported the following activities:

Net income	$	5,035
Purchase of equipment		961
Borrowings under line of credit (bank)		1,507
Proceeds from issuance of common stock		20
Cash received from customers		30,064
Payments to reduce notes payable (long-term)		55
Sale of investments		143
Proceeds from sale of equipment		7,494
Dividends paid		286
Interest paid		99

Required:

Based on this information, present the cash flows from investing and financing activities sections of the cash flow statement. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Solution

Modern Movables Corporation
Statement of cash flows (Partial)
Cash flows from Investing Activities
Purchase of equipment	$     (961.00)
Sale of Investments	$       143.00
Proceeds from sale of equipment	$   7,494.00
Net Cash flows from Investing activities		$    6,676.00
Cash Flows from Financing activities
Issuance of Common Stock	$         20.00
Borrowing from bank	$   1,507.00
Payment to reduce notes payable	$       (55.00)
Dividends paid	$     (286.00)
Cash flows from Financing activities		$    1,186.00