The following selected account balances were taken fromBuckeye Company\'s genera
ID: 2457936 • Letter: T
Question
The following selected account balances were taken fromBuckeye Company's general ledger at January 1, 2005 and December31, 2005:January 1,2005 December 31, 2005
Unearnedrevenue: 12,000 20,000
Inventory: 59,000 42,000
Accountspayable: 40,000 51,000
Salariespayable: 9,000 3,000
Investments: 75,000 68,000
Accountsreceivable: 63,000 96,000
Land: 58,000 88,000
Mortgagepayable: 120,000 95,000
Commonstock: 100,000 180,000
Retainedearnings: 22,000 35,000
The following information was taken from Buckeye Company's 2005income statement:
Salesrevenue: 420,000
Cost of goods sold: 300,000
Salariesexpense: 88,000
Loss on sale of investments: 6,000
NetIncome: 26,000
It is known that during 2005 Buckeye Company sold investmentshaving a 15,000 cost to another company who paid Buckeyecash. Additionally, Buckeye Company purchased land costing30,000 by paying cash.
Calculate the net cash flow from investingactivities for 2005. (include sign if negativeplease)
January 1,2005 December 31, 2005
Unearnedrevenue: 12,000 20,000
Inventory: 59,000 42,000
Accountspayable: 40,000 51,000
Salariespayable: 9,000 3,000
Investments: 75,000 68,000
Accountsreceivable: 63,000 96,000
Land: 58,000 88,000
Mortgagepayable: 120,000 95,000
Commonstock: 100,000 180,000
Retainedearnings: 22,000 35,000
The following information was taken from Buckeye Company's 2005income statement:
Salesrevenue: 420,000
Cost of goods sold: 300,000
Salariesexpense: 88,000
Loss on sale of investments: 6,000
NetIncome: 26,000
It is known that during 2005 Buckeye Company sold investmentshaving a 15,000 cost to another company who paid Buckeyecash. Additionally, Buckeye Company purchased land costing30,000 by paying cash.
Calculate the net cash flow from investingactivities for 2005. (include sign if negativeplease)
Unearnedrevenue: 12,000 20,000
Inventory: 59,000 42,000
Accountspayable: 40,000 51,000
Salariespayable: 9,000 3,000
Investments: 75,000 68,000
Accountsreceivable: 63,000 96,000
Land: 58,000 88,000
Mortgagepayable: 120,000 95,000
Commonstock: 100,000 180,000
Retainedearnings: 22,000 35,000
The following information was taken from Buckeye Company's 2005income statement:
Salesrevenue: 420,000
Cost of goods sold: 300,000
Salariesexpense: 88,000
Loss on sale of investments: 6,000
NetIncome: 26,000
It is known that during 2005 Buckeye Company sold investmentshaving a 15,000 cost to another company who paid Buckeyecash. Additionally, Buckeye Company purchased land costing30,000 by paying cash.
Calculate the net cash flow from investingactivities for 2005. (include sign if negativeplease)
Explanation / Answer
Investing activities Sale ofInvestments 9,000 Purchase of Investments (8,000) Purchase ofland (30,000) Net cash used by investingactivities (29,000) Explanation Sale of investments Buckeye sold investments cost of 15,000 for a loss of 6,000 . so15,000 -6,000 = 9,000 received by sale. Purchase of investments Beginninig investment - sales of investments = 75,000 - 15,000 =60,000 But the ending balance is 68,000 . so the difference between thesetwo gives 8,000.