Question

If Tamarisk, Inc. realizes a loss of $9400 on a cash sale of office equipment having a book value of $93600, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Answer 1

Answer:

The total amount reported in the cash flows from investing activities section of the statement of cash flows is $84,200.

Explanation:

Cash flow from Investing Activities involve the Purchase and or sale of Capital Investments in the business.

The only cash item from Investing Activity for Tamarisk, Inc in the sale of office equipment is the Proceeds or Selling Price that it received in the sale transaction.

Calculation of the Sale Proceeds :

Hint : Open an Office Equipment Disposal T - Account

Office Equipment Disposal T - Account

Debit :

Book Value                               $93,600

Totals                                        $93,600

Credit :

Profit and Loss                           $9,400

Proceeds (Balancing figure)    $84,200

Totals                                        $93,600

Conclusion :

The total amount reported in the cash flows from investing activities section of the statement of cash flows is $84,200.