Question

Lamar Corporation purchased land for $145,000. Later in the year the company sold land with a book value of $192,000 for $215,000. Show how the effects of these transactions are reported on the statement of cash flows using the indirect method.

Transaction	Amount	Increase or Decrease	Statement of Cash Flows Section
Gain on sale of land	$
Cash received for sale of land	$
Cash paid for purchase of land	$

Answer 1

* The indirect method always begin with net income. Therefore effect of gain is an increase and loss is a decrease in net income, we will subtract a gain and odd a loss. * Put in investing activities cash flows are prepared in the same way under the direct method as direct method. Therefore, incoming of cash results in increase we add the amount and outgoing at cash we subtract the amount paid. * The indirect method always begin with net income. Therefore effect of gain is an increase and loss is a