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do?invoker assignments&takeAssignmen; assignment-take&.inprogress false Show Me HowCaloulator Land Transactions on the Statement of Cash Flows Alpha Corporation purchased land for $320,000. Later in the year, the company sold a different piece of land with a book value of $176,000 for $157,000. How are the effects of these trensactions reported on the statement of cash nows? Use the minus sign to indicate cash out flows, cash payments, decreases in cash and tor any .stments, if required. r a transaction has no emet on the statement of cash hows, seed wo emer from the drop down me and leeve the amount box biank Amount Gain or loss on sale of land 19,000 Cosh recitived from sale of land Part of cash fows from Investing activities157,000 of cash fiows used Cash pas tor purchase of lans Part tor inesting ctivites320,000 8:57 0 SAMSUNG

Solution

Answers

---Land purchased for $ 320,000 for cash: This refers to the cash outflow of $ 320,000.

---Land sold for $ 157,000 cash: This refers to the Cash Inflow.

---Book Value of Sold land was $ 176,000 but it was sold for $ 157,000. Hence it was sold at a loss of $ 19,000 [176000 – 157000]

A.Gain or Loss on Sale of Land will form part of Operating Activities. Loss of $ 19,000 must have been deducted from Net Income while preparing Income Statement and hence, in Cash Flow statement, the same will be ADDED.

---Action: Added to Net Income $ 19,000

B.Cash received from sale of Land will affect Investing activities section.

---Action: part of Cash Flows from Investing activities $ 157,000

C.Cash paid for purchases will also affect Investing activities.

---Action: part of Cash Flows from Investing activities $ 320,000

Cash Flows from Operating activities

Net Income

XX

Adjusted for….

Loss on Sale of Land

$         19,000.00

Net Cash provided by operating activities

XX

Cash Flows from Investing activities

Purchase of Land

$   (3,20,000.00)

Sale of Land

$     1,57,000.00

Net Cash used in Investing activities

$ (1,63,000.00)

Cash Flows from Operating activities
Net Income		XX
Adjusted for….
Loss on Sale of Land	$         19,000.00
Net Cash provided by operating activities		XX
Cash Flows from Investing activities
Purchase of Land	$   (3,20,000.00)
Sale of Land	$     1,57,000.00
Net Cash used in Investing activities		$ (1,63,000.00)