Cash Flows from Investing Activities During the year, Blaylock Company sold equi

Question

Cash Flows from Investing Activities

During the year, Blaylock Company sold equipment with a book value of $280,000 for $380,000 (original purchase cost of $480,000). New equipment was purchased.

Blaylock provided the following comparative balance sheets:

Blaylock Company Comparative Balance Sheets At December 31, 2015 and 2016 2015 2016 Long-Term Assets: Plant and equipment Accumulated depreciation Land $2,200,000 $2,150,000 (1,200,000) (1,270,000) 1,000,000 1,437,500 Required: Calculate the investing cash flows for the current year. Use a minus sign to indicate a cash outflow

Explanation / Answer

Plant and equipment Account

DETAILS DEBIT($) DETAILS CREDIT($) Opening Balance 2,200,000 Bank - sale 380,000 Gain on sale (380,000 - 280,000) 100,000 Closing Balance 2,150,000 Purchases (balancing figure) 230,000 Total 2,530,000 2,530,000

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