Below are cash transactions for Goldman Incorporated, which provides consulting

Question

Below are cash transactions for Goldman Incorporated, which provides consulting services related to mining of precious metals.

a. Cash used for purchase of office supplies, $1,850.
b. Cash provided from consulting to customers, $45,100.
c. Cash used for purchase of mining equipment, $72,000.
d. Cash provided from long-term borrowing, $59,000.
e. Cash used for payment of employee salaries, $23,900.
f. Cash used for payment of office rent, $11,900.
g. Cash provided from sale of equipment purchased in c. above, $22,400.
h. Cash used to repay a portion of the long-term borrowing in d. above, $39,500.
i. Cash used to pay office utilities, $4,200.
j. Purchase of company vehicle, paying $9,900 cash and borrowing $14,900.

Required:

Calculate cash flows from investing activities. (List cash outflows as negative amounts.)

Cash flows from investing activities

Explanation / Answer

CASH FLOW FROM INVESTING ACTIVITIES:

Cash flow from investing activities are all cash flows related to purchase and sell of FIXED ASSETS.

c. Cash used for purchase of mining equipment, $72,000.

g.Cash provided from sale of equipment purchased in c. above, $22,400.

j.Purchase of company vehicle, paying $9,900 cash and borrowing $14,900.

Cash used for purchase of mining equipment,

($72,000)

Cash provided from sale of equipment purchased in c. above, $22,400.

$94,400

(72000+22400)

Purchase of company vehicle, paying $9,900 cash and borrowing $14,900.

$ (24,800.)

(9900+14900)

Total Cash Flow for investing activities

($2,400.)

Borrowing of $14,900 will be cash in flow from financing activities and cash outflow in investing activity

Cash flow from investing activities= -$2,400

Cash used for purchase of mining equipment,

($72,000)

Cash provided from sale of equipment purchased in c. above, $22,400.

$94,400

(72000+22400)

Purchase of company vehicle, paying $9,900 cash and borrowing $14,900.

$ (24,800.)

(9900+14900)

Total Cash Flow for investing activities

($2,400.)

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