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Determining Net Cash Flow from Investing Activities Davis Inc. reported the following information: 12/31/2019 12/31/2018 Equipment...

Determining Net Cash Flow from Investing Activities Davis Inc. reported the following information:

12/31/2019 12/31/2018

Equipment $160,000 $115,000

Accumulated depreciation (85,000) (59,000)

Investment (long-term) 18,610 10,000

In addition, Davis sold equipment costing $12,500 with accumulated depreciation of $8,950 for $2,330 cash, producing a $1,220 loss. Davis reported net income for 2019 of $122,350. Required: Compute net cash flow from investing activities. Use a minus sign to indicate negative cash flows (outflows).

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Answer #1

Cash flow Statement (partial)

Cash Flow from Investing Activities:

Sale of Equipment

$      2,330.00

Purchase of Equipment

$ (57,500.00)

Purchase of Investment

$    (8,610.00)

B. Cash flow from Investing Activities

$ (63,780.00)

Working

Beginning balance of Equipment account

$    1,15,000.00

Less: Cost of Equipment sold

$        12,500.00

$    1,02,500.00

Ending balance of Equipment account

$    1,60,000.00

Equipment Purchased (160000-102500)

$        57,500.00
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