In 2015, 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 2015, Valencia should report the following with respect to the above transactions:

Question

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The purchase of equipment for $363,000 represents cash used in investing activities, while the sale of special purpose machinery for $182,000 represents cash provided by investing activities. The net effect is $181,000 net cash used by investing activities. There is no mention of any cash flows related to financing or operating activities in the scenario provided.

In 2015, Valencia Company Purchased Equipment for $363,000 and Also