Canton Company sold land that cost $340,000 for $370,000 cash. Indicate whether each of the following statements is true or false regarding Canton's statement of cash flows (SCF).
_____ a) If Case uses the direct method, they would show a $30,000 cash inflow in the operating section of the SCF.
_____ b) Case would show a $370,000 cash inflow in the investing section of the SCF.
_____ c) Case would show a $340,000 cash inflow in the financing section of the SCF.
_____ d) Case would disclose the event as a noncash investing and financing activity.
_____ e) If Case uses the indirect method to prepare 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.

Question

Quizplus · Accepted Answer

The Answer of Canton Company sold land that cost $340,000 for $370,000 cash. Indicate whether each of the following statements is true or false regarding Canton's statement of cash flows (SCF).
_____ a) If Case uses the direct method, they would show a $30,000 cash inflow in the operating section of the SCF.
_____ b) Case would show a $370,000 cash inflow in the investing section of the SCF.
_____ c) Case would show a $340,000 cash inflow in the financing section of the SCF.
_____ d) Case would disclose the event as a noncash investing and financing activity.
_____ e) If Case uses the indirect method to prepare 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.

Canton Company Sold Land That Cost $340,000 for $370,000 Cash