Old South Company purchased investments for $55,000 and plant assets for $147,000 during the current year, during which it also sold plant assets for $66,000, at a gain of $6,000. The company also purchased treasury stock for $78,000 and sold a new issue of common stock for $523,000. Determine the amount of cash provided by or used for investing activities for the year.

Question

Business

Tamia Estrada

20 April, 02:30

Old South Company purchased investments for $55,000 and plant assets for $147,000 during the current year, during which it also sold plant assets for $66,000, at a gain of $6,000. The company also purchased treasury stock for $78,000 and sold a new issue of common stock for $523,000. Determine the amount of cash provided by or used for investing activities for the year.

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Agustin Holloway · Answer 1

The cash used by investing activity is $136,000.00 as shown in the workings below.

Explanation:

The cash provided by or used by investing activities can be computed thus:

Plant sold $66,000

Investments ($55,000)

Plant assets ($147,000)

Cash used by investing activities ($136,000)

The cash used by investing activities is $136,000 as shown above.

The outflow of $78000 for the purchase of treasury stock relates to financing.

The inflow of $523000 for new share issue is also a financing activity.

The financing activities are transactions relating to the providers of finance, that is the shareholders and debt-holders