Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others. Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others. To Explain: The reason for not reporting the gain from sale of an asset as cash flow from the operating activities in the statement of cash flows .

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Answer 1

Question

Chapter 21, Problem 21.14Q

To determine

Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others.

Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others.

To Explain: The reason for not reporting the gain from sale of an asset as cash flow from the operating activities in the statement of cash flows.

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Depreciation is incorporated in cash flows because it: A. Is unavoidable cost B. Is a cash flow C. Involves an outflow D. Reduces tax liability

Provide a brief explanation of why depreciation of capital assets is considered in determining potential net income from an investment, but not included in determining the net cash flow of an investment.

Does the value of any asset depends on the cash flows producedby the asset? Why?

Answer 2

Question

Chapter 21, Problem 21.14Q

To determine

Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others.

Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others.

To Explain: The reason for not reporting the gain from sale of an asset as cash flow from the operating activities in the statement of cash flows.

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Answer 3

Question

Chapter 21, Problem 21.14Q

To determine

Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others.

Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others.

To Explain: The reason for not reporting the gain from sale of an asset as cash flow from the operating activities in the statement of cash flows.

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Answer 4

Question

Chapter 21, Problem 21.14Q

To determine

Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others.

Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others.

To Explain: The reason for not reporting the gain from sale of an asset as cash flow from the operating activities in the statement of cash flows.

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Answer 5

Chapter 21, Problem 21.14Q

To determine

Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others.

Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others.

To Explain: The reason for not reporting the gain from sale of an asset as cash flow from the operating activities in the statement of cash flows.

Answer 6

Chapter 21, Problem 21.14Q

To determine

Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others.

Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others.

To Explain: The reason for not reporting the gain from sale of an asset as cash flow from the operating activities in the statement of cash flows.

Answer 7

Chapter 21, Problem 21.14Q

To determine

Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others.

Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others.

To Explain: The reason for not reporting the gain from sale of an asset as cash flow from the operating activities in the statement of cash flows.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 21 - Effects of all cash flows affect the balances of...Ch. 21 - Prob. 21.2Q Ch. 21 - Prob. 21.3Q Ch. 21 - Prob. 21.4Q Ch. 21 - Prob. 21.5Q Ch. 21 - Prob. 21.6Q Ch. 21 - Prob. 21.7Q Ch. 21 - The sale of stock and the sale of bonds are...Ch. 21 - Does the statement of cash flows report only...Ch. 21 - Prob. 21.10Q

Solution Summary: The author explains the reason for not reporting the gain from sale of an asset as cash flow from the operating activities in the statement of cash flows.

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