Test 4 Review O\'Shaughnessy ACCT 201 FAIS 1. Use the following company informat

Question

Test 4 Review O'Shaughnessy ACCT 201 FAIS 1. Use the following company information to calculate its net cash provided or used by investing activities: (a) Equipment with a book value of S125,000 and an original cost of $220,000 was sold at a gain of $22,000. (b) Paid $49,000 cash for a new truck (c) Sold land costing $30,000 for $26,000 cash, realizing a $4,000 loss. (d) Purchased treasury stock for $53,000 cash. (e) Long-term investments in stock are sold for $41,000 cash, realizing a gain of $3,500 Cash flows from investing activities Use the following information to calculate the net cash provided or used by financing activities for the Brooks Corporation: (a) Net income, $26,000. (b) Sold common stock for $8,000 cash. (c) Paid cash dividend of $5,000 (d) Paid bond payable, $15,000. (e) Purchased equipment for $13,000 cash. 2. Cash flows from financing activities:

Explanation / Answer

1)

2)

Note:

net income and equipment purchase are the items of operating and investing activities respectively.

3)

4)

Particulars $ Sale of equipment ($125000 + $22000) 147000 Purchase of truck -49000 Sale of land 26000 Sale of investments in stock 41000    Net Cash flow from investing activities 165000 Note: Purchase of treasury stock is financing activities Note: It has been assumed that the investment was made in the stock of other companied for investment purposes

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