Reference no: EM131737389

Q1. A company had the following cash flows for the year:

Purchased inventory, $60,000

Sold goods to customers, $90,000

Received loan from a local bank, $150,000

Purchased land, $180,000

Purchased treasury stock, $40,000

Paid dividends, $10,000

Sold delivery truck, $30,000

What amount would be reported for net investing cash flows on the Statement of Cash Flows?

($150,000).

($180,000).

$30,000.

($190,000).

Q2. Alliance Products purchased equipment that cost $120,000. It had an estimated useful life of four years and no residual value. The equipment was depreciated by the straight-line method and was sold at the end of the third year of use for $25,000 cash. Alliance should record:

A gain of $5,000.

A loss of $5,000.

Neither a gain nor a loss since the computer was sold at its book value.

Neither a gain nor a loss since the gain would not be recognized.