Christopher Corp. is preparing its statement of cash flows using the indirect me
ID: 2528626 • Letter: C
Question
Christopher Corp. is preparing its statement of cash flows using the indirect method. It provides the following information about transactions for the year:
Plant assets,
netlong dash—beginning
balance: $108,000
Plant assets,
netlong dash—ending
balance: $149,000
Equipment was purchased for $67,000.
Equipment with a net asset value of $12,000 was sold for $19,000.
Depreciation Expense of $19,000 was recorded during the year.
What was the amount of net cash provided by (used for) investing activities?
A.
$48,000
B.
$(67,000)
C.
$(41,000)
D.
$(48,000)
Explanation / Answer
Cash flow from investing activities or Used for investing activities
(A) Plant assets purchased (WN no.1) = ($60,000)
(B) Sale of Equipments (WN no.2) = $19,000
Therefore cash used for investing activities(A-B) = ($41,000)
please see working note
WN no.1 PLANT ASSETS ACCOUNT
Particular
Amount ($)
Particular
Amount($)
Balance b/d
$108,000
By depn
$19,000
To bank(bal. fig)
$60,000
By balance c/d
$149,000
$168,000
$168,000
WN NO.2 EQUIPMQNT ACCOUNT
Particular
Amount ($)
Particular
Amount($)
Balance b/d
$67,000
By bank
$19,000
By P&L
$ 7,000
By balance c/d (bal. Fig.)
$55,000
$74,000
$74,000
Bal. fig. is balancing figure for balancing the account
It is assume that the equipments are purchased at the beginning of the year
Particular
Amount ($)
Particular
Amount($)
Balance b/d
$108,000
By depn
$19,000
To bank(bal. fig)
$60,000
By balance c/d
$149,000
$168,000
$168,000
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