Asked by Libby Craig on Jun 05, 2024
Verified
The carrying amount of property,plant and equipment is $1000 at the start of the year and $1400 at the end of the year.During the year,the following occurred: Sale of equipment-carrying amount $40
Acquisition of equipment-financed by share issue $200
Depreciation expense for year-$120
Investing cash flow is:
A) ($400) .
B) ($200) .
C) ($160) .
D) ($360) .
Carrying Amount
The book value of an asset or liability on a company's financial statement, reflecting its accounting value rather than market value.
Investing Cash Flow
Cash inflows and outflows related to transactions involving the acquisition and disposal of long-term assets and investments not included in cash equivalents.
- Ascertain cash transactions related to operational, investment, and financing functions by analyzing the given information.
Verified Answer
HC
HARMONY CHESTNUTJun 11, 2024
Final Answer :
D
Explanation :
The change in carrying amount of property, plant and equipment is $1400 - $1000 = $400. This includes the sale of equipment for $40, which means the net change due to other transactions is $400 - $40 = $360. The acquisition of equipment financed by share issue is a non-cash transaction, so it is not included in investing cash flow. The depreciation expense for the year is also a non-cash transaction and is not included in investing cash flow. Therefore, the net change in property, plant and equipment due to investing activities is ($360).
Learning Objectives
- Ascertain cash transactions related to operational, investment, and financing functions by analyzing the given information.