Question

If a gain of $6,459 is realized in selling (for cash) office equipment having a book value of $54,096, find the total amount reported in the cash flows from investing activities section of the statement of cash flows.

Select the correct answer.

$47,637

$60,555

$54,096

$6,459

Answer 1

of the statement of cash flows.

Only the sale Value or sales proceeds shall be reported under the cash flows from investing activities section of the statement of cash flows which is calculated as follows

Gain on sale of equipment = Sale Value of Equipment – Book Value of Equipment

$6,459 = Sale Value of Equipment - $54,096

Sale Value of Equipment = $54,096 + $6,459

Sale Value of Equipment = $60,555

“Hence, the total amount reported in the cash flows from investing activities section of the statement of cash flows will be $60,555”