Question

On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows:

ACCOUNT Land ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
Jan. 1 Balance 868,000
Mar. 12 Purchased for cash 104,300 972,300
Oct. 4 Sold for $95,550 63,840 908,460

Answer 1

Answer and Explanation:

The items that should be reported on the cash flow statement is shown below;

On March 12 Purchase of fixed assets - investing activity - deducted - $104,300

On Oct 4 Sale of fixed assets - investing activity - added - $63,840

Gain on sale of fixed assets - operating activities - deducted - $31,710 ($95,550 - $63,840)