[san4596]

NINJA Question –

I believe the answer to be $9,000, or am I missing something?

Polk Co. acquires a forklift from Quest Co. for $30,000. The terms require Polk to pay $3,000 down and finance the remaining $27,000. On March 1, Year 1, Polk pays the $3,000 down and accepted delivery of the forklift. Polk signed a note that requires Polk to pay principal payments of $1,000 per month for 27 months beginning July 1, Year 1. What amount should Polk report as an investing activity in the statement of cash flows for the year ended December 31, Year 1?

CPA 2015.0 – FAR

Statement of Cash Flows, Question # 153

I answered $9,000, but the answer in the system is $3,000.

CPA EXAM: DONE!!!!
Ethics Course: Passed
Application Mailed: 3/16/15
Professional Conduct Exam: 97
Certification Date: 4/2/15!!!

[jeff]

Here is the NINJA MCQ explanation:

Cash payments to purchase equipment are outflows from investing activities. The $3,000 down payment is an investing activity outflow.

The $27,000 financed and the principal payments are financing activities.

[Author]

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