During 20X1, Craig Company had the following transactions: a. Purchased $300,000 of 10-year bonds issued by Makenzie

Question:

During 20X1, Craig Company had the following transactions:

a. Purchased $300,000 of 10-year bonds issued by Makenzie Inc.

b. Acquired land valued at $105,000 in exchange for machinery.

c. Sold equipment with original cost of $810,000 for $495,000; accumulated depreciation taken on the equipment to the point of sale was $270,000.

d. Purchased new machinery for $180,000.

e. Purchased common stock in Lemmons Company for $82,500.

Required:

1. Prepare the net cash from investing activities section of the statement of cash flows.

2. Usually, the net cash from investing activities is negative. How can Craig cover this negative cash flow? What other information would you like to have to make this decision?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...