Question

If a gain of $5,634 is realized in selling (for cash) office equipment having a book value of $59,856, the total amount reported in the Cash flows from investing activities section of the statement of cash flows is a.$5,634 b.$59,856 c.$54,222 d.$65,490

Answer 1

Answer:

d. $65,490

Explanation:

A cash flow statement (CFS) is a financial statement shows the amount of cash and cash equivalents that has entered and left an organisation. It only deals in cash and cash equivalents.

From the question, the sale for cash of office equipment with a book value of $59,856 at profit of $5,634 will be recorded in the Cash flows from investing activities section of the CFS based on the actual cash that entered the company. In this case, the total cash received from the sale and which is the actual cash that entered the company in respect of this transaction is the addition of the book value of $59,856 and the gain of $5,634 which is approximately $65,490.

Therefore, the total amount reported in the Cash flows from investing activities section of the statement of cash flows is $65,490.

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