Question

Blossom Construction had long-term assets before depreciation of $850,000 on December 31, 2016 and $1,200,000 on December 31, 2017. How much cash flow was invested in long-term assets by Blossom during 2017?

Cash flow invested in long-term assets $______

Answer 1

Solution :

The Cash Flow invested in long-term assets during a year is calculated as follows :

Cash flow invested in long-term assets during a year = Closing Balance of Long Term assets - Opening Balance of Long Term assets

As per the information given in the question we have

Long term assets as on December 31, 2016 = Opening Balance of Long Term assets   = $ 850,000

Long term assets as on December 31, 2017 = Closing Balance of Long Term assets = $ 1,200,000

Applying the available information in the formula we have

The Cash flow Invested in long Term assets during 2017 = $1,200,000 - $ 850,000 = $ 350,000

Thus the Cash flow Invested in long Term assets during 2017 = $ 350,000