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6 January, 06:01

On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows:

The reporting statement of fixed asset account is shown. The transactions are listed as follows:

Date Item Debit Credit Debit Credit

Jan. 1 Balance 885,000

Mar. 12 Purchased for cash 274,000 1,159,000

Oct. 4 Sold fo $151,000 129,000 1,030,000

Item Section of Statement of Cash Flows Added or Deducted Amount

Mar. 12: Purchase of fixed asset $

Oct. 4: Sale of fixed asset $

Gain on sale of fixed asset (assume the indirect method) $

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Answers (1)
  1. 6 January, 06:21
    0
    Answer and Explanation:

    The computation of the purchase of fixed assets is shown below:-

    March 12 Purchase of fixed assets = $274,000. This same is shown in the investing activities section of the cash flow statement in the negative sign

    October 4 Sale of fixed assets = $151,000. This same is shown in the investing activities section of the cash flow statement in the positive sign

    Gain on sale of the fixed asset is

    = Sales Value - Cost of asset

    = $151,000 - $129,000

    = $22,000

    This amount is shown in the operating activities section of the cash flow statement in the negative sign
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