Asked by Janninah Miller on Jun 26, 2024
Verified
Autry Corporation's balance sheet and income statement appear below: Cash dividends were $40.The company sold equipment for $19 that was originally purchased for $6 and that had accumulated depreciation of $4.The net cash provided by (used in) investing activities for the year was:
A) $19
B) $140
C) ($159)
D) ($140)
Accumulated Depreciation
The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was acquired and put into use.
Cash Dividends
Cash distributions from a company's earnings to its shareholders.
Balance Sheet
An account that outlines the financial position of a company, detailing its assets, liabilities, and owners' equity at a given point in time.
- Perceive the segments constituting net cash received from (or deployed in) investment actions.
Verified Answer
The sale of equipment for $19 results in a gain of $9 ($19 - $6 - $4), which means that this is the cash inflow from investing activities. The cash dividends paid of $40 are a cash outflow from financing activities and do not affect investing activities.
Therefore, the net cash provided by (used in) investing activities for the year is:
$19 (cash inflow from sale of equipment) - $0 (no cash outflow for equipment purchases) = $19
However, the question asks for the net cash provided by (used in) investing activities, not just cash inflow. Therefore, the answer is:
$19 (cash inflow from sale of equipment) - $159 (cash outflow from paying dividends) = ($140)
Learning Objectives
- Perceive the segments constituting net cash received from (or deployed in) investment actions.
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