Question

Land Transactions on the Statement of Cash Flows

Alpha Corporation purchased land for $474,000. Later in the year, the company sold a different piece of land with a book value of $204,000 for $186,000.

How are the effects of these transactions reported on the statement of cash flows assuming the indirect method is used? Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required. If a transaction has no effect on the statement of cash flows, select "No effect" from the drop down menu and leave the amount box blank.

Transactions	Action	Amount
Gain or loss on sale of land	Added to net income	$
Cash received from sale of land	Part of cash flows from investing activities	$
Cash paid for purchase of land	Part of cash flows from investing activities	$

Looking for amounts

Answer 1

(Since only amounts are asked, therefore only those are given)

CASH FLOW FROM OPERATING ACTIVITIES
Gain or Loss on sale of Land
=> (Sale value of Land - Book value of Land Sold)
=> $186000 - $204000
=> -18000 LOSS ON SALE OF LAND

CASH FLOW FROM INVESTING ACTIVITIES
Cash received from sale of Land
=> Sale value of the land sold = $186000 (Ans)

Cash paid for purchase of Land
=> Purchase value of land for Alpha corporation = $474000 (Ans)

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