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During 20X1, Craig Company had the following transactions:

1. Purchased $199,400 of 10-year bonds issued by Makenzie Inc.
2. Acquired land valued at $71,000 in exchange for machinery.
3. Sold equipment with original cost of $540,600 for $329,600; accumulated depreciation taken on the equipment to the point of sale was $179,500.
4. Purchased new machinery for $119,400.
5. Purchased common stock in Lemmons Company for $54,200.

Required:

Question Content Area

1. Prepare the net cash from investing activities section of the statement of cash flows. (Note: Use a minus sign to indicate any decreases in cash or cash outflows.)

Craig Company Statement of Cash Flows (Partial) Year Ending December 31, 20X1

Cash flows from investing activities:
Land in exchange for machineryNet cash from investing activitiesPurchase of bonds	- Select -
Land in exchange for machineryNet cash from investing activitiesSale of equipment	- Select -
Land in exchange for machineryNet cash from investing activitiesPurchase of new machinery	- Select -
Land in exchange for machineryNet cash from investing activitiesPurchase of common stock	- Select -
Net cash from investing activitiesPurchase of bondsSale of equipment	$- Select -
Noncash investing activity:
Land in exchange for machineryPurchase of common stockSale of equipment	$- Select -

Question Content Area

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? Complete the items below that outline a response to the questions posed above.

The negative cash flow from investing activities can be covered by using cash from

operating activities onlyoperating and financing activitiesoperationsfinancing activities only

.

Some of the activities listed below would provide cash for investment. Select "Yes" or "No" for cash for investment activities.

Issuing bonds	YesNo
Splitting common stock	YesNo
Issuing common stock	YesNo
Repurchasing common stock	YesNo
Taking out mortgages	YesNo
Declaring a dividend	YesNo

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