The following selected account balances were taken from BuckeyeCompany\'s genera

Question

The following selected account balances were taken from BuckeyeCompany's general ledger at Jan. 1st, 2005 and Dec. 31st 2005:
                                     Jan. 1st,2005                 Dec. 31st, 2005
Accounts receivable:      51,000                             70,000
Inventory:                      39,000                             28,000
Accountspayable          45,000                             51,000
Salariespayable              7,000                                3,000
Investments                   46,000                              59,000
Commonstock           110,000                             130,000
Retainedearnings          25,000                               41,000

The following selected information was taken from Buckeye Company's2005 statement of cash flows:

Cash collected from customers: 385,000
Cash paid to purchase inventory: 199,000
Cash paid to employees: 85,000
Cash paid to purchase investments: 40,000
Cash received from sale of investments: 35,000
Cash paid for dividends: 30,000

Calculate the amount of the gain on sale ofinvestments reported in Buckeye Company's 2005 incomestatement.

Explanation / Answer

Gain on sale of Investments Gain = $ 8,000 Explanation Beg. Bal Investments + Purchases - Ending balance 46,000 + 40,000 - 59,000 $ 27,000 worth of investments is sold for $ 35,000 So, gain is 35,000 - 27,000 = $ 8,000

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