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)
| | $2.7 million outflow | $6.0 million inflow |
|
| C)
| | $6.0 million outflow | $2.7 million inflow |
|
|
|
