Short Company

Exercise 15-29 Cash Flow from Investing Activities

During 2013, Shorts Company had the following transactions:

a.       Purchased $200,000 of 10-year bonds issued by Makenzie Inc.

b.       Acquired land valued at $70,000 in exchange for machinery.

c.        Sold equipment with original cost of $540,000 for $330,000; accumulated depreciation taken on the equipment to the point of sale was $180,000.

d.       Purchased new machinery for $120,000.

e.        Purchased common stock in Lemmons Company for $55,000.

Required:

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

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