Question

If a gain of $225,000 is incurred in selling (for cash) a building having a book value of $900,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Answer 1

Answer:

$1,125,000

Explanation:

Given;

Gain from asset disposal = $225,000

Book value of asset disposed = $900,000

Therefore,

Amount of cash received from the sale = $900,000 + $225,000

                                                                  = $1,125,000

This represents an inflow of cash and will be represented by a positive value in the statement of cash flows. The total amount reported in the cash flows from investing activities section of the statement of cash flows is $1,125,000