Determining cash flows from investing activities
The following accounts and corresponding balances were drawn from Winston Company's 2012 and 2011 year-end balance sheets.
Account Title | 2012 | 2011 |
Investment securities | $102,000 | $112,000 |
Machinery | 520,000 | 425,000 |
Land | 140,000 | 90,000 |
Other information drawn from the accounting records:
1. Winston incurred a $2,000 loss on the sale of investment securities during 2012.
2. Old machinery with a book value of $5,000 (cost of $25,000 minus accumulated depreciation of $20,000) was sold. The income statement showed a gain on the sale of machinery of $4,000.
3. Winston did not sell land during the year.
Required
a. Compute the amount of cash flow associated with the sale of investment securities.
b. Compute the amount of cash flow associated with the purchase of machinery.
c. Compute the amount of cash flow associated with the sale of machinery.
d. Compute the amount of cash How associated with the purchase of land.
e. Prepare the investing activities section of the statement of cash flows.
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