In 2016, Valencia Company purchased equipment for $363,000 and also sold some special purpose machinery with a book value of $155,000 for $182,000.In its statement of cash flows for 2016, Valencia should report the following with respect to the above transactions:

Question

Quizplus · Accepted Answer

The purchase of equipment for $363,000 is classified as a cash outflow from investing activities, while the sale of machinery for $182,000 is also classified as a cash inflow from investing activities. Therefore, the net cash used by investing activities is $181,000. There is no information provided to suggest any cash flow activity related to financing or operating activities.

In 2016, Valencia Company Purchased Equipment for $363,000 and Also