In 2018,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 2018,Anderson should report the following with respect to the above transactions:

Question

Quizplus · Accepted Answer

The purchase of equipment for $363,000 is an investing activity and results in a net cash outflow of $363,000. The sale of special purpose machinery for $182,000 is also an investing activity, but it only results in a net cash outflow of $181,000 (since the book value was only $155,000). Therefore, the net cash used by investing activities is $181,000 (option C). There is no information to suggest that the transactions impact operating activities or financing activities.

In 2018,Anderson Company Purchased Equipment for $363,000 and Also Sold