Assume Happy Feet Corporation completed the following transactions. a. Sold a st

Question

Assume Happy Feet Corporation completed the following transactions. a. Sold a store building for $630,000. The building had cost Happy Feet $1,800,000, and at the time of the a. sale its accumulated depreciation totaled $1,120,000 b. Lost a store building in a fire. The building cost $360,000 and had accumulated depreciation of Depreciation expense Gain on sale Insurance procaeds fram fire Loss on sale Purchase of store fixtures Renovation of store Sale of building $210,000. The insurance proceeds received by Happy Feet totaled $170,000. c. Renovated a store at a cost of $170,000 d. Purchased store fixtures for $80,000. The fixtures are expected to remain in service for 10 years and then be sold for $50,000. Happy Feet uses the straight-line depreciation method Requirement 1. For each transaction, show what Happy Feet would report for investing activities on its statement of cash flows. Show negative amounts in parentheses.

Explanation / Answer

A) Sale of store building will generate a cash inflow of 680000.

Sale of building 680000.

B) Insurance proceeds from fire 170000.

C)Renovation of store (170000).There is cash out flow.

D) Purchase of store fixtures. (80000). There is cash out flow.

Note:in calcucalation of cash flow from investing activity we only consider the net cash outflow or inflow and we don't consider the depreciation in investing activity.

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