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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Determining Net Cash Flow from Investing Activities

Davis Inc. reported the following information:

12/31/2019

12/31/2018

Equipment

$220,000

$155,000

Accumulated depreciation

(135,000)

115,200

Investment (long-term)

20,200

12,000

In addition, Davis sold equipment costing $22,900 with accumulated depreciation of $18,150 for $3,500 cash, producing a $1,250 loss. Davis reported net income for 2019 of $122,350.

Required:

Compute net cash flow from investing activities.

To determine

Introduction:

Income from investing activities is a thing on the income enunciation that reports the all out change in an association’s money position coming about because of speculation increases or misfortunes and changes coming about because of wholes spent on interests in capital resources, for example, plant and equipment.

To choose:

Compute net cash flow from investing activities.

Explanation

For the purpose of calculating the investing activity

Particular Amount ($)
Purchase of Equipment

Proceed form Equipment

Purchase of Investment (Long term)

Cash used for investing activity

(87,900)

3,500

(8,200)

(92,600)

Working note 1.

Equipment account

Date Particular Amount ($) Date Particular Amount($)
To balance b/d

To bank a/c

(balance figure)

155,000

87,900

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