In addition to the facts in Practice Activity 9.21, Amacom Enterprises acquired a building to expand the production of leather shoes and bags. The building was paid for through the bank account of Amacom Enterprises. The business invested in the shares of a Fast Moving Consumer Goods (FMCG) Company. The FMCG Company’s equity shares are quoted on the London Stock Exchange. The investment was paid for through the bank account of Amacom. Subsequently, Amacom Enterprises sold its equity shares in Meet Hospitality Company for cash. Amacom gave a cash loan to Tech Support Enterprises. Tech Support is a start-up known for its indigenous support of small businesses. The office of Tech Support is not far from the registered address of Amacom Enterprises.
Required: Assume that the business is set to prepare a statement of cash flows for the period ended 31 May 2019, give examples of cash flows from investing activities.
See the suggested answers to practice activity 9.22 here.
Suggested answers to practice activity 9.22
Examples of cash flows from investing activities include:
i. Amounts paid through the bank to acquire building
ii. Payments through the bank to acquire equity shares of the FMCG Company whose equity shares are quoted on the London Stock Exchange
iii. Cash receipts from sales of equity shares in Meet Hospitality Company
iv. Cash loan to Tech Support
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