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If a gain of $7,515 is realized in selling (for cash) office equipment having a book value of $61,374, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

a.$68,889

b.$53,859

c.$61,374

d.$7,515

1 Answer

6 votes

Final answer:

The total amount reported in the cash flows from investing activities section of the statement of cash flows is $68,889.

Option A is correct.

Step-by-step explanation:

The total amount reported in the cash flows from investing activities section of the statement of cash flows is $68,889.

To find this amount, we need to calculate the cash received from selling the office equipment. The gain realized from selling the equipment is given as $7,515, and the book value of the equipment is $61,374.

Subtract the book value from the gain: $7,515 - $61,374 = -$53,859.

Since the gain is realized in cash, the cash received from selling the equipment is -$53,859.

However, when reporting the cash flows from investing activities, the amount should be positive. So, we take the absolute value of the cash received: $53,859.

Finally, we add the cash received to the gain: $53,859 + $7,515 = $61,374.

Therefore, the total amount reported in the cash flows from investing activities section of the statement of cash flows is $68,889.

User Peter Zhang
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