Question

44. In preparing a company's statement of cash flows for the most recent year, the following...

44. In preparing a company's statement of cash flows for the most recent year, the following information is available:

Loss on the sale of equipment

$

14,000

Purchase of equipment

226,000

Proceeds from the sale of equipment

102,000

Repayment of outstanding bonds

87,000

Purchase of treasury stock

25,000

Issuance of common stock

96,000

Purchase of land

116,000

Increase in accounts receivable during the year

33,000

Decrease in accounts payable during the year

75,000

Payment of cash dividends

35,000

Net cash flows from investing activities for the year were:

Select one:

a. $120,000 of net cash provided

b. $265,000 of net cash used

c. $234,000 of net cash used

d. $240,000 of net cash used

e. $280,000 of net cash provided

45. A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for cash resulting in a loss of $10,000. The amount that should be reported as a source of cash from the sale of the machine under cash flows from investing activities is:

Select one:

a. $40,000

b. $45,000

c. $10,000

d. $35,000

e. $55,000

Homework Answers

Answer #1

44.

Net cash used in investing activities = Proceeds from the sale of equipmen - Purchase of equipment - Purchase of land

= 102,000 - 226,000 - 116,000

= - $240,000

Correct option is (d)

45.

Cost of machine = $130,000

Accumulated depreciation = $85,000

Book value of machine = Cost of machine - Accumulated depreciation

= 130,000 - 85,000

= $45,000

Loss on sale of machine = $10,000

Sale price of machine = Book value of machine - Loss on sale of machine

= 45,000 - 10,000

= $35,000

Cash flow from sale of machine = $35,000

Correct option is (d)

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