The following accounts and corresponding balances were drawn from balance sheets: Account Title Investment securities Machinery Land Year 2 $ 101,800 520, 300 145,800 Year 1 $ 116,900 425,000 93,800
The following accounts and corresponding balances were drawn from balance sheets: Account Title Investment securities Machinery Land Year 2 $ 101,800 520, 300 145,800 Year 1 $ 116,900 425,000 93,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 12-10A (Algo) Determining cash flows from investing activities LO 12-3
[The following information applies to the questions displayed below.]
The following accounts and corresponding balances were drawn from Delsey Company's Year 2 and Year 1 year-end
balance sheets:
Account Title
Investment securities
Machinery
Land
Exercise 12-10A (Algo) Part b
Year 2
5 101,800
520, 300
145,800
Other Information drawn from the accounting records:
1. Delsey incurred a $1,340 loss on the sale of investment securities during Year 2.
2. Old machinery with a book value of $5,000 (cost of $25,530 minus accumulated depreciation of $20,530) was sold.
The income statement showed a gain on the sale of machinery of $4,880.
3. Delsey did not sell land during the year.
Year 1
$ 116,900
425,000
93,800
Cost of machinery purchased
b. Compute the amount of cash flow associated with the purchase of machinery.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa880cc3d-71b2-44bc-9eb8-ccb18aa2c0ed%2Fc3ef5b7e-15a4-422c-a69c-26b9d984eed1%2F9vom0lr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 12-10A (Algo) Determining cash flows from investing activities LO 12-3
[The following information applies to the questions displayed below.]
The following accounts and corresponding balances were drawn from Delsey Company's Year 2 and Year 1 year-end
balance sheets:
Account Title
Investment securities
Machinery
Land
Exercise 12-10A (Algo) Part b
Year 2
5 101,800
520, 300
145,800
Other Information drawn from the accounting records:
1. Delsey incurred a $1,340 loss on the sale of investment securities during Year 2.
2. Old machinery with a book value of $5,000 (cost of $25,530 minus accumulated depreciation of $20,530) was sold.
The income statement showed a gain on the sale of machinery of $4,880.
3. Delsey did not sell land during the year.
Year 1
$ 116,900
425,000
93,800
Cost of machinery purchased
b. Compute the amount of cash flow associated with the purchase of machinery.
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