Land costing $88,000 was sold for $50,000 cash. The loss on the sale was reported on the income statement as other expense. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

Question

Quizplus · Accepted Answer

The amount reported as an investing activity on the statement of cash flows is the cash received from the sale, which is $50,000. The original cost of the land is not reported on the statement of cash flows since it is a non-cash transaction. The loss on the sale is reported as an expense on the income statement, but does not impact the cash flow statement.

Land Costing $88,000 Was Sold for $50,000 Cash