Question

Elkin Company reported the following in its Statement of cash Flows for 2014: Cash Flows from...

Elkin Company reported the following in its Statement of cash Flows for 2014:
Cash Flows from operations   ($35,000)
Cash Flows from investing activities   ($20,000)
Cash Flows from financing activities   +$115,000
Net increase in cash   +$60,000
Which of the following is a possible description of the company’s results?
Group of answer choices

The company issued bonds to generate funds for its operations and investments in stock

The company sold Investments in stock and Treasury Stock to fund its operations

The company generated cash from operations to fund Investments in Stock as well as purchase of Treasury Stock

The company sold Investments in Stock to fund its operations and purchase of Treasury Stock

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Answer #1

Cash Flow Statement:

Cash flow from operation is negative ($ 35,000) it means from operation money is received less but invested more

Cash flow from Investing activities is also negative ($ 20,000) it means money is invested in purchased of fixed assets and investment.

Cash Flow from Financing Activities is positive cash flow of $ 115,000 it means money is generated through bonds or fresh issue of shares.

As per above explanation,

Answer = Option 1 =

The company issued bonds to generate funds for its operations and investments in stock

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