Question

Cash sale of merchandise inventory. 2. Sale of delivery truck at book value. 3. Sale of Xanthe common stock for cash. 4. Issuance of a note payable to a bank for cash. 5. Sale of a security held as an available-for-sale investment. 6. Collection of loan receivable. How many of the above items will appear as a cash inflow from investing activities on a statement of cash flows for the current year

Answer 1

Answer and Explanation:

As per the data given in the question,

3 of the above items will appear as a cash inflow from investing activities.

These are as follows :

1. Collection of loan receivable.

2. Cash sale of delivery truck at book value.

3. Sale of a security held as an available-for-sale investment.

Any gain or loss on sale of long term asset is an operating activity although any purchase or sale of a long term asset is come under the investing activities.

Loan receivable is an asset too therefore, it will be shown under investing activities.