Question

Reporting Land Acquisition for Cash and Mortgage Note on Statement of Cash Flows

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
2014
Jan. 1 Balance 310,200
Feb. 10 Purchased for cash 468,400 778,600
Nov. 20 Purchased with long-term mortgage note 630,700 1,409,300
Item Section of Statement of Cash Flows Added or Deducted Amount
Purchase of land for cash
$
Purchase of land by issuing
long-term mortgage note

Answer 1

Item; Section of Statement of Cash Flow; Added or Deducted Amount

Purchase of land for cash; Investing Activities ; deducted 310,200

Purchase of land by issuing long-term mortgage note; separate schedule ; report only 468,400

Step-by-step explanation:

Investing Activities section of cashflow includes

Cash used in the purchase of operating materials such as land, equipment and so on.

Item; Section of Statement of Cash Flow; Added or Deducted Amount

Purchase of land for cash; Investing Activities ; deducted 310,200

Purchase of land by issuing long-term mortgage note; separate schedule ; report only 468,400