If a gain of $221000 is realized in the cash sale of a building having a book value of $882000, the total amount reported in the

Question

weqwewe [10]

3 years ago

11

If a gain of $221000 is realized in the cash sale of a building having a book value of $882000, the total amount reported in the

cash flows from investing activities section of the statement of cash flows is

Business

1 answer:

djyliett [7] · Answer 1 · 2022-02-10T18:03:05+03:00

Answer:

$1,103,000

Explanation:

The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.

The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.

The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.

For assets disposed, the amount received from the disposal is the amount recorded as an investing activity.

Amount received - Book value of asset = Gain on disposal

Amount received = $221000 + $882000

= $1,103,000