Luke Corporation is a manufacturer of home furnishings. Selected financial information about Luke is listed below: • Borrowed $850,000 from a bank. Purchased equipment for $210,000 in cash. • Purchase investments for $285,000. • Received dividends of $51,000 from an investment in Davis Corp • Paid dividends of $55,000. • Issued shares of preferred stock for $500,000. Repurchased
outstanding common shares using $100,000 in cash. • Purchased land for $100,000 cash. • Paid $36,000 interest expense on a bank loan. • Increased Inventories by $320,000 • Increased accounts receivable by $217,000. • Increased accounts payable $85,000. Use the above information to calculate Luke's:
a. cash used or provided by investing activities
b. cash used or provided by financing activities
a . cash used or provided by investing activities:
-Purchased investments for $285,000
- Purchased land for $100,000
- Purchased equipment for $210,000 cash.
= ($595,000) cash used by investing activities.
b. cash used or provided by investing activities
+Received $850,000 from bank borrowing
+Issued shares of preferred stock for $500,000
- Paid dividends of $55,000
- Paid $100,000 to repurchase outstanding common stock
= $1,1950,000 cash provided by financing activities
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