Question

land transactions on the statement of cash flow

Example Exercise 16-5 Land Transactions on the Statement of Cash Flows Alpha Corporation purchased land for $125,000. Later in the year, the company sold a different piece of land with a book Obj. 2 value of $165,000 for $200,000. How are the effects of these transactions reported on the statement of cash flows? Follow My Example 16-5 The gain on the sale of the land is deducted from net income, as follows: Gain on sale of land (35,000) The purchase and sale of land are reported as part of cash flows from investing activities, as follows Cash received from sale of land Cash used for purchase of land $200,000 (125,000) Practice Exercises: PE 16-5A, PE 16-5B

Answer 1

Alpha Corporation
Cash flow statement ( Partial )
	$
1 .Cash from operating activities;
Deduct gain on sale of land from net income ( $ 200,000 - $ 165,000)	(35,000)
2. Cash from investing activities;
Purchase of land	(125,000)
Sale of land	200,000
Net cash from investing activities	75,000