Question

Wolverine Company started the year with 51468 in their Investment account. They sold the investment for48736 during the year. What is the amount of adjustment to Cash from Operations, if any, from this transaction? Use a negative sign if your answer involves a reduction to cash from operations.

Answer 1

The amount of adjustment to Cash from Operations can be determined by whether the investment sold was classified as an operating activity or an investing activity. In this case, the adjustment would be -$2,732.

Step-by-step explanation:

The amount of adjustment to Cash from Operations is determined by whether the investment sold was classified as an operating activity or an investing activity. If the investment was classified as an operating activity, there would be no adjustment to Cash from Operations. However, if the investment was classified as an investing activity, the amount of adjustment would be the difference between the sale price and the initial investment. In this case, the adjustment would be ($48,736 - $51,468) = -$2,732. Therefore, the adjustment to Cash from Operations would be -$2,732.