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Managerial Accounting: The Corners...
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Managerial Accounting: The Corners...
During the year, Roberts Company sold equipment with a book value of $ 140,000 for $190,000 (original purchase cost of $240,000). New equipment was purchased.
Roberts provided the following comparative balance sheets:
Required:
Calculate the investing cash flows for the current year.
Compute the investing cash flows for the current year.
Cash Flows from Investing Activities:
This category of a cash flow statement shows the investing activities which involves the purchase or sale of long-term assets. This includes acquiring new asset or acquiring stock in another company.
The calculation of investing cash flows for the current year is shown in table below:
| R Company | |
| Cash Flow Statement | |
| Investing Cash Flows: | |
| Particulars | Amount ($) |
| Sale of equipment | 190,000 |
| Purchase of equipment1 | (215,000) |
| Purchase of land2 | (218,750) |
| Net cash from investing activities | (243,750) |
Table (1)
Therefore, net cash flow from investing activities is $(243,750).
Working Note:
1.
Calculation of purchase value of equipment:
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