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Categorize Items for the Cash Flow Statement

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.

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