The following accounts and corresponding balances were drawn from Delsey Company’s Year 2 and Year 1 year-end balance sheets:

Other information drawn from the accounting records:
1. Delsey incurred a $6,000 loss on the sale of investment securities during Year 2.
2. Old machinery with a book value of $8,000 (cost of $36,000 minus accumulated depreciation of $28,000) was sold. The income statement showed a gain on the sale of machinery of $4,500.
3. Delsey did not sell land during the year.

Required
a. Compute the amount of cash flow associated with the sale of investment securities.
b. Compute the amount of cash flow associated with the purchase of machinery.
c. Compute the amount of cash flow associated with the sale of machinery.
d. Compute the amount of cash flow associated with the purchase of land.
e. Prepare the investing activities section of the statement of cash flows.

Transcribed Image Text:

Account Title Year 2 Year 1 Investment securities $110,000 486,000 160,000 $116,500 437,000 100,000 Machinery Land