Question

Question 7 The following selected account balances were taken from XYZ Company's general ledger at January 1, 2018 and December 31, 2018: Inventory Equipment Investments Land Mortgage payable Retained earnings January 1, 2018 31,000 123,000 42,000 91,000 111,000 32,000 December 31, 2018 18,000 144,000 37,000 40,000 60,000 37,000 Additional information for 2018 appears below: 1. XYZ Company sold land costing $60,000 and recorded a $4,000 loss on the sale. 2. XYZ Company purchased equipment for $21,000 cash. 3. XYZ Company purchased investments for $60,000 cash and sold investments and reported a $31,000 gain on the sale. Calculate XYZ Company's net cash flow from investing activities for 2018. If your answer is negative, place a minus sign in front of your answer with no spaces in between (e.g., -1234).

Answer 1

Answer is $62,000

T Accounts is drawn up to arrive at numbers

Working notes: XYZ Company Cash flows from Investing Activities Purchase of investment Sale of investments Sale of Land Purchase of Land Purchase of Equipment Net Cash provided by Investing Activities opening balance Bank (balance paid) -$60,000 $96,000 $56,000 -$9,000 -$21,000 $62,000 Equipment $123,000 $21,000 closing balance $144,000 lance $144,000 $144,000 $144,000 $96,000 opening balance Bank (balance paid) P&LA/C (Gain on sale) Investments $42,000 Bank $60,000 $31,000 closing balance $133,000 $37,000 $133,000 opening balance Bank (balance paid) (Purchase) Land $91,000 Bank $9,000 Profit and Loss A/C $56,000 $4,000 closing balance $100,000 $40,000 $100,000