Question

Equipment with a book value of $83,500 and an original cost of $162,000 was sold at a loss of $32,000. Paid $106,000 cash for a new truck. Sold land costing $320,000 for $400,000 cash, yielding a gain of $80,000. Long-term investments in stock were sold for $91,400 cash, yielding a gain of $16,250. Use the above information to determine cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Net cash flow from investing activities $417,400

Step-by-step explanation:

The computation of cash flow from investing activity is given below:

Cash flow from investing activities

Add: Equipment sold ($83,500 - $32,000) $51,500

(Book value - loss )

Less : Acquisition of new truck -$106,000

Add : Land sold $400,000

Add : Long term investment sold $91,400

Net cash flow from investing activities $417,400