In 2013, Anderson 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 2013, Anderson should report the following with respect to the above transactions:

Question

Quizplus · Accepted Answer

The purchase of equipment for $363,000 is considered a cash outflow from investing activities. The sale of special purpose machinery for $182,000 with a book value of $155,000 results in a gain of $27,000, which is considered a cash inflow from operating activities. Therefore, the net cash used in investing activities is $181,000 ($363,000 - $182,000) and there is no cash flow impact on financing activities. Choice C is the best answer.

In 2013, Anderson Company Purchased Equipment for $363,000 and Also