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On march 1, Robertson Co.. purchased $2,000,000 in equity securities with the expectation of holding them long term. During September, these securities are reclassified as
On march 1, Robertson Co.. purchased $2,000,000 in equity securities with the expectation of holding them long term. During September, these securities are reclassified as "trading securities" with part of these equity securities later sold for $750,000. Assuming that the company also received $15,000 in dividend income from these equity investments, what is the effect from this transaction activity on operating cash flow if Robertson Co. uses the direct method and adheres to U.S. GAAP?
1. $0
2. $15,000
3. $750,000
4. $765,000
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