For the year ended December 31, 2007, Gremlin Corporation reported the following transactions:
- Issued 5,000 shares of preferred stock for land with a fair value of $4.8 million.
- Purchased a patent for $3.3 million cash.
- Acquired 40% of the common stock of an affiliate for $2.7 million cash which was borrowed from a bank.
- Exchanged equipment with a book value of $1.7 million for equipment valued at $2.1 million. The exchange was an even trade.
- Converted bonds payable with a book value of $5 million to 50,000 shares of common stock with a fair value of $6 million.
Calculate Gremlin’s cash flow from investing activities and cash flow from financing activities for the year ended December 31, 2007.
|
Cash flow from investing activities |
Cash flow from financing activities |
A.
| $1.7 million inflow |
$1.3 million outflow |
B.
| $6.0 million outflow |
$2.7 million inflow |
C.
| $2.7 million outflow |
$6.0 million inflow |
|
