Question

During 2019, Lowes Company sold equipment with a book value of $120,000 for proceeds of $145,000. The company purchased new equipment for $320,000 by signing a long-term note payable. No other transactions impacted long-term asset accounts during 2019. The investing section of the statement of cash flows will report Group of answer choices net cash outflows of $295,000. net cash outflows of $175,000. net cash inflows of $145,000. net cash inflows of $25,000.

Answer 1

Answer:

Overally, the statement of cash flows will report net cash inflows of $145,000.

Explanation:

The sale would attract proceeds of $145,000 which is a cash inflow to the company.

The profit on sale of ( $145,000 - $120,000 )$25,000 is a non- cash flow item.

The Purchase of  new equipment by signing a long-term note payable is a non-cash financing and investment activity.

Conclusion :

Overally, the statement of cash flows will report net cash inflows of $145,000.