Avatar Company Uses the Indirect Method to Prepare Its Statement

question 140

Multiple Choice

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet: Additional information provided:
What was the net amount of Cash from investing activities?

• A)$30,000 negative
• B)$60,000 positive
• C)$52,000 negative
• D)$38,000 negative

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Probability-Weighted

An approach to forecast future outcomes which involves assigning probabilities to different possible events and calculating expected values.

Time Value

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate. It is the value at which a company's shares are initially recorded in its books.