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Determine the cash flow from the sale of property

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Reference no: EM132718100

Computing and Reporting Cash Flow Effects of Sales of Plant and Equipment During two recent years, Perez Construction Inc., disposed of the following plant and equipment:

                                                                                                                 Year 1                     Year 2
Plant and equipment (at cost)                                                   $75,000             $13,500
Accumulated depreciation on equipment disposed of                       $40,385              $3,773
Cash received                                                                           $17,864            $12,163
Gain (loss)                                                                              $(16,751)            $2,436

Required:

Problem 1. Determine the cash flow from the sale of property for each year that would be reported in the investing activities section of cash flow statement.

Problem 2. Perez uses the indirect method for the operating activities section of the cash flow statement. What amounts related to the sales would be added or subtracted in the computation of Net Cash Flows from Operating Activities for each year?

Reference no: EM132718100

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