Allen Company bought a new copy machine to be depreciated straight line for three years for use by sales personnel. Where would this purchase be reflected on the Statement of Cash Flows?

Question

Business

Bruno Brennan

4 February, 20:06

Allen Company bought a new copy machine to be depreciated straight line for three years for use by sales personnel. Where would this purchase be reflected on the Statement of Cash Flows?

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Answers (1)

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Malcolm Stephens · Answer 1

Investing activity

Explanation:

Investing activities: It reports activities that involves buying and selling long-term assets. The buying or acquiring or purchasing is a cash outflow whereas the sale is a cash inflow

Since in the given situation, the purchase of a new copy machine would be reflected under the investing activity as it is to be shown with the negative sign due to outflow of the cash