BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

Solutions

Chapter
Section
BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
46 views

During the year, Swasey Company sold equipment with a book value of $560,000 for $760,000 (original purchase cost of $960,000). New equipment was purchased.

Swasey provided the following comparative balance sheets:

Chapter 14, Problem 20BEA, During the year, Swasey Company sold equipment with a book value of 560,000 for 760,000 (original

Required:

Calculate the investing cash flows for the current year.

To determine

Compute the investing cash flows for the current year.

Explanation

Cash Flows from Investing Activities:

This category of a cash flow statement shows the investing activities which involves the purchase or sale of long-term assets. This includes acquiring new asset or acquiring stock in another company.

The calculation of investing cash flows for the current year is shown in table below:

S Company
Cash Flow Statement
Investing Cash Flows:
ParticularsAmount ($)
Sale of equipment760,000
Purchase of equipment1(860,000)
Purchase of land2(875,000)
        Net cash from investing activities(975,000)

Table (1)

Therefore, net cash flow from investing activities is $(975,000).

Working Note:

1.

Calculation of purchase value of equipment:

(PurchaseValueofEquipment)=(EndingBalanceofPlantandEquipment+CostofEquipmentSoldBeginning&#

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

TIME VALUE OF MONEY Answer the following questions: a. Assuming a rate of 10% annually, find the FV of 1,000 af...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Name and describe six areas of specialization for a managerial accountant.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)