Explanation Cash flows from investing activities: This section of cash flows statement provides information concerning about the purchase and sale of capital assets by the company. Following is the reporting of the sale of equipment in the statement of cash flows using indirect method. Sale of equipment is considered as an investing activity in the statement of cash flows. Under indirect method, cash received from the sale of equipment is treated as inflow of cash under investing activities. The profit earned from the sale of equipment is deducted from the net income because the gain earned from the sale of equipment was included in net income and it does not result in any cash inflows from operating activities. On the contrary, the loss incurred on sale of equipment is added to the net income because the loss incurred from the sale of equipment was included in net income but it does not result in any cash outflows from operating activities. Calculate the net cash inflow (outflow) from investing activities...

9th Edition

ISBN: 9781259222139

Author: Robert Libby, Patricia Libby, Frank Hodge Ch

Publisher: McGraw-Hill Education

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Chapter 12, Problem 9MCQ

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Ascertain the net cash inflow (outflow) from investing activities.

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Chapter 12, Problem 8MCQ

Chapter 12, Problem 10MCQ

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