Question

chapter 12 problem 15a. need the solution explained on required e and f.

e. amount of cash flow for the purchase building during 2012

LO 3 excel Problem 12-15A Determining cash flows from investing activities The following information was drawn from the year-end balance sheets of Desoto Com Account Title 2012 2011 CHECK FIGURES b. $5,000 c. $35,000 Investment securities Equipment Buildings Land $ 33,500 235,000 845,000 80,000 $ 30,000 220,000 962,000 69,000 Additional information regarding transactions occurring during 2012: 1. Investment securities that had cost $5,600 were sold. The 2012 income statement com loss on the sale of investment securities of S600. 2. Equipment with a cost of $50,000 was purchased. Statement of Cash Flows 3. The income statement showed a gain on the sale of equipment of $6,000. On the date of sale, accumulated depreciation on the equipment sold amounted to $8,000. 4. A building that had originally cost $158,000 was demolished. 5. Land that had cost $25,000 was sold for $22,000. Required a. Determine the amount of cash flow for the purchase of investment securities during 2012. b. Determine the amount of cash flow from the sale of investment securities during 2012. c. Determine the cost of the equipment that was sold during 2012. d. Determine the amount of cash flow from the sale of equipment during 2012. e. Determine the amount of cash flow for the purchase of buildings during 2012. f. Determine the amount of cash flow for the purchase of land during 2012. g. Prepare the investing activities section of the 2012 statement of cash flows.

f. amount of cash flow for the purchase land 2012.

Answer 1

e)

e)Purchase of building =Value of building at end + cost of building demolished -Value of building at beginning

                           = 845000 + 158000 - 962000

                           = 41000

Since purchase of building results in cash outflow it is denoted as " -41000 "

f)Cash flow for purchase of land = Land value at end of year + cost of land sold - Land value at beginning of year 2011

                        = 80000 + 25000 -69000

                        = $ 36000

Since purchase of land results in cash outflow it is denoted as " -36000 "