During the current period, Notaras Company sold some old equipment for $2,000, collected anaccounts receivable balance of $2,500 from customers, purchased new equipment for $20,000 andborrowed $3,000 from a bank. What were the company's net cash flows for investing activities? Use apositive number to indicate an overall cash inflow or a negative number to indicate an overall cashoutflow.

Answered: During the current period, Notaras…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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During the current period, Notaras Company sold some old equipment for $2,000, collected an
accounts receivable balance of $2,500 from customers, purchased new equipment for $20,000 and
borrowed $3,000 from a bank. What were the company's net cash flows for investing activities? Use a
positive number to indicate an overall cash inflow or a negative number to indicate an overall cash
outflow.

Expert Solution

Step 1: Explanation of the concept of Cash Flows

Cash flows of a company represent the movement of actual money in and out of the business, reflecting its ability to generate cash from operating activities, make investments, and handle financing, providing a crucial indicator of its financial health and liquidity.

Effective cash flow management is vital for covering expenses, investing in growth, and meeting financial obligations, ensuring a company's sustainability and success.

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