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Categorize Items for the Cash Flow Statement

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Cash Flow Statement:
ABC Limited reflected the following items in the 20X5 financial statements:

Income Statement
Amortization expense, machinery $300,000
Amortization expense, patent 60,000
Loss on sale of machinery 25,000
Gain on sale of land 30,000

Balance sheet:
Decrease in land account $400,000
Increase in net patent account 65,000
Decrease in net machinery account 465,000

The only entry through the land account was a sale of land. The other accounts may reflect more than one transaction.

Question:
Assuming indirect method is used in operating activities section, list the items that would appear on the cash flow statement under which sections and state any assumptions.

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Solution Preview

Cash Flow Statement:
ABC Limited reflected the following items in the 20X5 financial statements:

Income Statement
Amortization expense, machinery $300,000
Amortization expense, patent 60,000
Loss on sale of machinery 25,000
Gain on sale of land 30,000

Balance sheet:
Decrease in land account $400,000
Increase in net patent account 65,000
Decrease in net machinery account 465,000

The ...

Solution Summary

This helps in categorizing items for the Cash flow statement

$2.19