Reporting Land Acquisition for Cash and Mortgage Note on Statement of Cash FlowsOn the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows:ACCOUNT LandACCOUNT NO.BalanceDateItemDebitCreditDebitCreditJan.Balance229,100Feb.10Purchased for cash371,100600,200Nov. 20Purchased with long-term mortgage note486,2001,086,400ItemSection of Statement of Cash FlowsAdded or DeductedAmountPurchase of land for cashPurchase of land by issuinglong-term mortgage note

Name: Reporting Land Acquisition for Cash and Mortgage Note on Statement of
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Description: Reporting Land Acquisition for Cash and Mortgage Note on Statement of Cash FlowsOn the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows:ACCOUNT LandACCOUNT NO.BalanceDateItem

This question deals with the statement of cashflow. Statement of cashflow indicates the cash inflow as well as cash outflow for different activities. Cashflow statement is divided into three activities which are, (1) Cashflow from operating activity (2) Cashflow from investing activity (3) Cashflow from financing activityHere in this case there are two transaction which we will need to decide under which head it should be considered. (1) Purchase of land for cash - Needs to report in "Cashflow from investing activity" and it should be deducted as this is cash outflow Amount = $371,100 (2) Purchase of land by issuing long term mortgage - No need to report it anywhere as there is no cashflow.

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Reporting Land Acquisition for Cash and Mortgage Note on Statement of Cash Flows On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 229,100 Feb. 10 Purchased for cash 371,100 600,200 Nov. 20 Purchased with long-term mortgage note 486,200 1,086,400 Item Section of Statement of Cash Flows Added or Deducted Amount Purchase of land for cash Purchase of land by issuing long-term mortgage note

Reporting Land Acquisition for Cash and Mortgage Note on Statement of Cash Flows On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 229,100 Feb. 10 Purchased for cash 371,100 600,200 Nov. 20 Purchased with long-term mortgage note 486,200 1,086,400 Item Section of Statement of Cash Flows Added or Deducted Amount Purchase of land for cash Purchase of land by issuing long-term mortgage note

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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