Question

Exercise 12-7 cash flows from investing activities lo p3
a. equipment with a book value of $65,300 and an original cost of $133,000 was sold at a loss of $14,000.
b. paid $89,000 cash for a new truck.
c. sold land costing $154,000 for $198,000 cash, yielding a gain of $44,000.
d. long-term investments in stock were sold for $60,800 cash, yielding a gain of $4,150. use the above information to determine this company's cash flows from investing a

Answer 1

Cash flow from investing activities are as follows:

Sale of Equipment $51300

Purchase of Truck ($89000)

Sale of Land $198000

Sale of Long Term Investments $60800

Net Cash Flow from Investing Activities $221100

Calculation of Receipts from sale of equipment are as below:

Book Value of Equipment 65300

Less Loss on Sale 14000

Proceeds from sale 51300

We shall ignore original coat of the asset to calculate the above. Also only cash flows shall be considered to find the cash flow from investing activities.