Question

Roberts Company, a manufacturing firm, sold factory equipment for $270,000, purchased an office building for $6,600,000,...

Roberts Company, a manufacturing firm, sold factory equipment for $270,000, purchased an office building for $6,600,000, repaid principal on a note payable for $2,400,000 plus $250,000 of interest, and paid cash dividends of $22,000. On the Cash Flow Statement cash flows from investing activities would show:

Multiple Choice $6,330,000 outflow. $6,030,000 outflow. $8,752,000 outflow. $9,002,000 outflow.

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Answer #1

Correct answer-------------$6,330,000 outflow

Working

Cash flow from Investing activities:
Sale of Equipment $            270,000
Purchase of building $      (6,600,000)
Net Cash used for investing activities $    (6,330,000)

Payment for notes payable and dividend payment are financing cash flow and interest on note is operating cash flow.

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