Question

Elliott Corp.'s transactions for the year ended December 31, 2020 included the following: Purchased real estate for $1,250,000 cash which was borrowed from a bank. Sold available-for-sale securities for $1,000,000. Paid dividends of $1,200,000. Issued 500 shares of common stock for $500,000. Purchased machinery and equipment for $250,000 cash. Paid $900,000 toward a bank loan. Reduced accounts receivable by $200,000. Increased accounts payable $400,000. Elliott's net cash used in investing activities for 2020 was a. $1,500,000 b. $ 500,000 c. $ 750,000 d. $ 250,000

Answer 1

Answer:

b. $ 500,000

Explanation:

The computation of the net cash used in investing activities is shown below:

Cash flow from investing activities

Purchased real estate -$1,250,000

Purchased machinery and equipment -$250,000

Sold available-for-sale securities for $1,000,000

Net cash used by investing activities -$500,000

The negative sign represents the cash outflow and the positive sign represents the cash inflow and the same is to be considered