A company sold a piece of land for $40,000 which had an original cost of $25,000. What is the cash ﬂow effect of this transaction?

Question

Quizplus · Accepted Answer

The cash flow effect of this transaction is a $40,000 increase in cash flows from investing activities because the sale of a piece of land (a long-term asset) is considered an investing activity, and the entire proceeds from the sale ($40,000) represent the increase in cash.

A Company Sold a Piece of Land for $40,000 Which