Question

Christopher Corp. is preparing its statement of cash flows using the indirect method. It provides the following information about transactions for the year:
Plant assets, net – beginning balance: $108,000
Plant assets, net – ending balance: $144,000
Equipment costing $62,400 was purchased for cash
Equipment with a net asset value of $12,000 was sold for $16,800
Depreciation Expense of $14,400 was recorded during the year
What was the amount of net cash provided by (used for) investing activities?
A.$(45,000)
B.$45,600
C.$45,600
D.$(60,000

Answer 1

Answer:

$(45,600)

Explanation:

Among the data given, net cash used for investing activities is computed as follows;

Purchase of equipment $(62,400)

Sale of equipment 16,800

Total amount used in ————-

investing activities $(45,600)

*Depreciation is part of operating activities

*Plant asset does not engage in actual cash activities during the period

Indirect method of preparing statement of cash flow used to reveal sources of cash generated during the period.