Question

Additional Information for 20X2: Net income was $480,000 and dividends of $400,000 were declared. Common stock was issued for cash. A new long-term investment was acquired for $360,000. A long-term investment was sold for $160,000. Equipment that cost $600,000 was sold for $200,000. The book value of those assets was $150,000. The dividends actually paid during 20X2 are:

Answer 1

Answer:

Net Cash Flow from operating activities during 2012 is $400,000

Explanation:

Cash Flows From Operating activities:

Net Income $480,000

Dividends paid $80,000

Net Cash Flow from Operating activities $400,000

The transaction related to sold and purchase of equipment are classified as investing activities and transactions related to stock issues and loan are financing activities.