Flow Company Has Provided the Following Information for the Year

question 2

Multiple Choice

Flow Company has provided the following information for the year ended December 31,2010:
Cash paid for interest,$20,000;
Cash paid for dividends,$6,000;
Cash dividends received,$4,000;
Cash proceeds from bank loan,$29,000;
Cash purchase of treasury stock,$11,000;
Cash paid for equipment purchase,$27,000;
Cash received from common stock sale,$37,000;
Cash received from sale of land with a $32,000 book value,$25,000;
Acquisition of land costing $51,000 in exchange for preferred stock issuance.
Paid a $100,000 note payable by exchanging used machinery with a $77,000 book value.
How much was Flow's net cash flow from investing activities?

• A)A net outflow of $2,000.
• B)A net inflow of $2,000.
• C)A net outflow of $53,000
• D)A net inflow of $49,000

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Definitions:

Period Cost

Costs that are not directly tied to the production process and are expensed in the period they are incurred.

Product Cost

The total expense incurred to manufacture a product or deliver a service, including materials, labor, and overhead costs.

Product Cost

The total of costs directly assigned to the production of a product, including raw materials, labor, and manufacturing overhead.

Period Cost

Expenses directly tied to business operations but not a part of the cost of manufacturing or producing goods, often administrative or sales expenses.