Question

iment-take&inprogress-false Cash Flows from Investing Activities 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: Swasey Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2 Long-Term Assets: Plant and equipment $4,400,000 $4,300,000 (2,400,000) (2,540,000) Accumulated depreciation 2,875,000 2,000,000 Land Required: Calculate the investing cash flows for the current year. Use a minus sign to indicate a cash outflow.

Answer 1

Answer with working is given below

Investing Cash flow -$975,000 Sale of Plant and Equipment $760,000 Purchase of Plant and Equipment | $860,000 Purchase of Land -$875,000 Cash flow from Investing Activity -$975,000 Working notes: $400,000 $760,000 Opening balance To Profit and Loss To bank (Balancing Figure) Plant and Equipment $4,400,000 Accumulated Depreciation $200,000 Bank $860,000 Closing balance $5,460,000 $4,300,000 $5,460,000 Plant and Equipment Accumulated Depreciation $400,000 Opening Balance P and L Account $2,540,000 (Balancing Figure) $2,400,000 $540,000 Closing balance $2,940,000 $2,940,000 Opening balance To bank (Balancing Figure) Land $2,000,000 $875,000 Closing balance $2,875,000 $2,875,000 $2,875,000