27. Investing Activities Section. The following information is from the noncurre

Question

27. Investing Activities Section. The following information is from the noncurrent asset portion of Ravalli LLC's balance sheet. December 31 2017 2016 Property, plant and equipment Accumulated depreciation Loans made to other entities Long-term investments $ 580,000 (235,000) 20,000 33,000 $ 440,000 (200,000) 300,000 60,000 The following activities occurred during 2017 . sold equipment with a book value of $46,000 (= $170,000 cost-$124,000 accumulated depreciation) for $37,000 cash and depreciation expense for the year totaled S159,000 Purchased equipment for $310,000 cash No additional loans to other entities were made during the year (Hint: Solve for the principal amount on loans collected during the year.) Sold long-term investments with an original cost of $27,00o for $33,0oo cash - Required: a. Prepare the investing activities section of the statement of cash flows for Ravalli LLC for the year ended December 31, 2017. Use the format presented in Figure 12.6. b. How much cash was provided by (used by) investing activities? Briefly describe what this amount tells us about the company

Explanation / Answer

a. Cash flows from investing activities

b. Cash provided by Investing activities is 40,000. This amount tells us that the company has generated net cash of 40,000 after the sale and purchse of equipment, collection of loans, sale of long term investments.

Proceeds from sale of equipment 37,000 Purchase of equipment (310,000) Proceeds from collection of loans from other entities 280,000 Proceeds from sale of long term investments 33,000 Cash provided by investing activities 40,000

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