During the fiscal year ended June 30,20X9,a private,not-for-profit hospital acquired equipment costing $75,000,with cash contributed by donors who restricted their contributions for this purpose.On the hospital's statement of cash flows for the year ended June 30,20X9,the equipment acquisition should be reported in which of the following sections?
I.Operating activities
II.Financing activities
III.Investing activities
A)I
B)II
C)III
D)I,II,III

Question

Quizplus · Accepted Answer

The acquisition of equipment is considered an investing activity as it involves the purchase of a long-term asset for use in the hospital's operations. The fact that the cash was contributed by donors does not change the nature of the transaction. Therefore, the equipment acquisition should be reported in the investing activities section of the hospital's statement of cash flows.

During the Fiscal Year Ended June 30,20X9,a Private,not-For-Profit Hospital Acquired