Indicate the effect each separate transaction has on investing cash flows. (Amounts to be deducted should be indicated with a minus sign.)

a. Sold a truck costing $40,000, with $22,000 of accumulated depreciation, for $8,000 cash. The sale results in a $10,000 loss.

b. Sold a machine costing $10,000, with $8,000 of accumulated depreciation, for $5,000 cash. The sale results in a $3,000 gain

c. Purchased stock investments for $16,000 cash. The purchaser believes the stock is worth at least $30,000 Cash flows from investing activities

Question

Business

Renee

9 November, 08:31

Indicate the effect each separate transaction has on investing cash flows. (Amounts to be deducted should be indicated with a minus sign.)

a. Sold a truck costing $40,000, with $22,000 of accumulated depreciation, for $8,000 cash. The sale results in a $10,000 loss.

b. Sold a machine costing $10,000, with $8,000 of accumulated depreciation, for $5,000 cash. The sale results in a $3,000 gain

c. Purchased stock investments for $16,000 cash. The purchaser believes the stock is worth at least $30,000 Cash flows from investing activities

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Jaqueline Sloan · Answer 1

Cash flow from investing activities

Cash received from sale of truck = $8,600

Cash received from sale of machine = $5,600

Cash paid for purchase of investment = - $16,300

Net cash used by investing activities = ($2,100)

Explanation:

Given:

a. Sold a truck costing $40,000, with $22,000 of accumulated depreciation, for $8,000 cash. The sale results in a $10,000 loss.

b. Sold a machine costing $10,000, with $8,000 of accumulated depreciation, for $5,000 cash. The sale results in a $3,000 gain

c. Purchased stock investments for $16,000 cash. The purchaser believes the stock is worth at least $30,000

Cash flow from investing activities

Cash received from sale of truck = $8,600

Cash received from sale of machine = $5,600

Cash paid for purchase of investment = - $16,300

Net cash used by investing activities = ($2,100)