Land Transactions on the A summary of the cash receipts and cash payments for a
ID: 2466734 • Letter: L
Question
Land Transactions on the A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.Statement of Cash Flows
Easterly Corporation purchased land for $398,000. Later in the year, the company sold a different piece of land with a book value of $167,000 for $189,000.
How are the effects of these transactions reported on the statement of cash flows assuming the indirect method is used? Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required. If a transaction has no effect on the statement of cash flows, select "No effect" from the drop down menu and leave the amount box blank. Transactions Gain or loss on sale of land Cash received from sale of land Cash paid for purchase of land $ $ $
Explanation / Answer
Cash Flow from operating activity Gain on sale of land ( 189000 - 167000) -22000 ( Gain on sale is subtracted from net income in cash flow from operatons section) Cash flow from investing activity Cash received from sale of land 189000 ( Cash received from sale is an inflow and is added in cash flow from investing activity section) Cash paid for purchase -398000 ( Cashpaid for purchase is an outflow and is deducted in cash flow from investing activity section)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.