Question

Equipment with a book value of $82,000 and an original cost of $169,000 was sold at a loss of $36,000. Paid $106,000 cash for a new truck. Sold land costing $325,000 for $415,000 cash, yielding a gain of $90,000. Stock investments were sold for $95,600 cash, yielding a gain of $14,000. Use the above information to determine cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

The net cash flow from investing activity is equal to $450,600.

What is Investing Activity?

The investing activity is regarding the purchase and sale of long-term assets. The sale of long-term assets is added to the cash flow, on the other hand, the purchase of fixed assets is deducted from the cash flow.

Cash flow from Investing activity:

Sale proceeds from equipment (Book Value - loss)      $46,000

Purchase of new truck                                                   -$106,000

Sale of land                                                                     $415,000

Sale of Stock investments                                               $95,600

Net cash flow from investing activity                         $450,600

hence, the net cash flow from investing activity is equal to $450,600.

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