Marvel Company sold land that cost $440,000 for $470,000 cash. Indicate whether each of the following statements is true or false regarding Marvel's statement of cash flows (SCF).
a)________ If Marvel uses the direct method, there would be a $30,000 cash inflow in the operating section of the SCF.b)________ If Marvel uses the indirect method to prepare the operating activities section of the statement of cash flows, the gain on the sale of the land would be added to net income in calculating the cash flows from operating activities.c)________ Marvel would report the event in the investing activities section of the SCF the same way whether it uses the direct method or the indirect method.d)________ Marvel would disclose the event as a noncash investing and financing activity.e)________ Marvel would report a $470,000 cash inflow in the investing section of the SCF.

Question

Quizplus · Accepted Answer

b)False c)True d)False e)T. Because cash is received, this event is not an example of noncash investing and financing activities.e)This is true. The cash received is a cash inflow from investing activities.

Marvel Company Sold Land That Cost $440,000 for $470,000 Cash