Lester Corporation's statement of cash flows for Year 2 shows the following investing activities:

-Refer to the above data. The cost (book value) of the marketable securities sold during Year 2 was:
A) $207,000.
B) $113,000.
C) $160,000.
D) Some other amount.

Question

Lester Corporation's statement of cash flows for Year 2 shows the following investing activities:
 
-Refer to the above data. The cost (book value) of the marketable securities sold during Year 2 was:
A) $207,000. 
B) $113,000. 
C) $160,000. 
D) Some other amount.

Quizplus · Accepted Answer

The cost of marketable securities sold during Year 2 is equal to the beginning balance of marketable securities minus the ending balance of marketable securities, plus the proceeds from the sale of marketable securities. The beginning balance of marketable securities is $320,000, the ending balance of marketable securities is $160,000, and the proceeds from the sale of marketable securities is $207,000. Therefore, the cost of marketable securities sold during Year 2 is $320,000 - $160,000 + $207,000 = $207,000.

Lester Corporation's Statement of Cash Flows for Year 2 Shows