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27 December, 19:28

Firefly Inc. sold land for $225,000 cash. The land has been purchased five years earlier for $275,000. The loss on the sale was reported on the income statement. On the statement of cash flows, what amount should Firefly report as an investing activity from the sale of the land?

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  1. 27 December, 20:36
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    Cash inflow of $225,000

    Explanation:

    Land is a non-current asset and the proceeds from sale of non-current assets form part of investing activities. Firefly Inc. has a cash inflow of $225,000 from the sale of land. So the cash received from sale of land will be added to cash flow from investing activities in the head: Purchase or Sale of an Asset.
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