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...

17th Edition

ISBN: 9781260218831

Author: Libby

Publisher: MCG CUSTOM

See similar textbooks

Concept explainers

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…

Videos

Question

Chapter 12, Problem 9MCQ

To determine

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

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 12, Problem 8MCQ

Chapter 12, Problem 10MCQ

Students have asked these similar questions

Do fast answer of this General accounting questions

Orange corp has variable costs solve this general accounting question

I need answer of this accounting questions

Chapter 12 Solutions

GB 112/212 MANAGERIAL ACC. W/ACCESS >C<

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - What are the major categories of business...Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Compare the two methods of reporting cash flows...Ch. 12 - Prob. 10Q

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

SEE MORE QUESTIONS

Recommended textbooks for you

Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College