Question

during 2020, coronado company sold a building with a book value of $155,000 for proceeds of $185,000. the company also sold long-term investments for proceeds of $42,000. the company purchased land and a new building for $330,000 by signing a long-term note payable. no other transactions impacted long-term asset accounts during 2020. compute net cash flows from investing activities

Answer 1

NET CASH FLOWS from INVESTING ACTIVITIES

= CASH INFLOWS - OUTFLOWS

NET CASH FLOWS from INVESTING ACTIVITIES:

= (185,000 + 42,000) - 0

NET CASH FLOWS from INVESTING ACTIVITIES:

= 227,000

• Explanation: ACCOUNTING

• MAKE A PLAN:

We need to calculate THE NET CASH FLOWS from INVESTING ACTIVITIES by considering the CASH INFLOWS and OUTFLOWS from the transactions mentioned.

• SOLVE THE PROBLEM:

(1) - CASH INFLOW from SELLING the BUILDING:

185,000

(2) - CASH INFLOW from SELLING LONG-TERM INVESTMENTS:

42,000

(3) - CASH OUTFLOW for PURCHASING LAND and a NEW BUILDING:

(NO CASH INVOLVED as it is a LONG-TERM NOTE PAYABLE).

ZERO (0)

DRAW THE CONCLUSION:

NET CASH FLOWS from INVESTING ACTIVITIES

= CASH INFLOWS - OUTFLOWS

NET CASH FLOWS from INVESTING ACTIVITIES:

= (185,000 + 42,000) - 0

NET CASH FLOWS from INVESTING ACTIVITIES:

= 227,000

I hope this helps you!