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Creative Sound Systems sold investments, land, and its own common stock for $31.0 million, $15.1 million, and $40.2 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $21.1 million, $25.1 million, and $12.1 million, respectively.
A) What amount should the company report as net cash flows from investing activities?
B) What amount should Creative Sound Systems report as net cash flows from financing activities?

Answer :

jepessoa

Answer:

Creative Sound Systems

Net cash flows from investing activities:

Cash inflow from sale of investments                     $31 million

Cash inflow from sale of land                                $15.1 million

Cash outflow from purchase of equipment        ($25.1 million)

Cash outflow from purchase of patent                ($12.1 million)

Net cash flows provided by investing activities    $8.9 million

Creative Sound Systems

Net cash flows from financing activities:

Cash inflow from issuing common stocks              $40.2 million

Cash outflow from purchase treasury stock          ($21.1 million)

Net cash flows provided by financing activities     $19.1 million

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