During the current year, Atkins Company sold a parcel of land for $84,000,000 cash. The land had been purchased by Atkins several years ago for $41,000,000. Atkins Company uses the indirect method to prepare its statement of cash flows. In order to reconcile profit for the year to net cash from operating activities, profit for the year must be:

Question

Quizplus · Accepted Answer

The profit for the year must be decreased by the original purchase price of the land ($41,000,000) and also decreased by the gain on sale ($84,000,000 - $41,000,000 = $43,000,000). Therefore, the profit must be decreased by a total of $43,000,000.

During the Current Year, Atkins Company Sold a Parcel of Land