Chapter 12: Cash Flows From Operating | Summary - Edubirdie

University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
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351

Pages:

1
Author:

stud_ice13

To determine cash flows from investing activities, we analyze changes in longterm assets and selected current accounts. Here’s the process applied to the provided transactions: Step-by-Step Analysis for Investing Cash Flows 1. Sold Factory (costing $800 with $700 of accumulated depreciation, with a $10 loss): • • • Calculate Book Value of Factory: $800 - $700 = $100 Selling Price: Book value of $100 - $10 loss = $90 Cash Flow Impact: +$90 cash inflow from sale of the factory. 2. Paid $70 for New Equipment: • Cash Flow Impact: -$70 cash outflow for equipment purchase. 3. Sold Long-Term Stock Investments for $20, Yielding a $4 Loss: • Cash Flow Impact: +$20 cash inflow from sale of stock investments. 4. Sold Land (cost $175) for $160 Cash, Yielding a $15 Loss: • Cash Flow Impact: +$160 cash inflow from sale of land. Summarizing Cash Flows from Investing Activities Total cash flow from investing activities is calculated as follows: 90+(−70)+20+160=20090 + (-70) + 20 + 160 = 20090+(−70)+20+160=200 Solution: The company’s cash flows from investing activities total $200.

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