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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

Orlando Inc. reported the following information:

12/31/2019

12/31/2018

Furniture

$46,000

$32,000

Accumulated depreciation

15,900

12,500

Investment (long-term)

38,000

50,000

In addition, Orlando sold furniture costing $8,000 with accumulated depreciation of $5,000 for $3,500. Orlando also reported a $3,000 gain on the sale of long-term investments.

Required:

Compute net cash flow from investing activities.

To determine

Introduction:

Cash stream from investing activities is a thing on the cash stream proclamation that reports the total change in an organization’s cash position resulting from investment gains or misfortunes and changes resulting from sums spent on investments in capital assets, such as plant and equipment.

To choose:

Compute net cash flow from investing activity.

Explanation
Particular Amount ($)
Purchase of furniture
Sale of furniture
Sale of investment
Cash from investing activity
(22,000)
3,500
12,500
6,000

Furniture Accounts

Particular Amounts ($) Particular Amounts ($)
Balance b/d
Profit on gain on sale of furniture a/c
Bank a/c
32,000
500
22,000
54,500
Bank a/c
Accumulated depreciation
Balance c/d
3,500
5,000
46,000
54,500

Accumulated depreciation ...

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