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

Other information drawn from the accounting records:
1. Teva incurred a $3,000 loss on the sale of investment securities during Year 2.
2. Old machinery with a book value of $8,000 (cost of $34,000 minus accumulated depreciation of $26,000) was sold. The income statement showed a gain on the sale of machinery of $7,500.
3. Teva incurred a loss of $4,000 on the sale of land in Year 2.

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 sale of land.
e. Prepare the investing activities section of the statement of cash flows.

Transcribed Image Text:

Account Title Investment securities Year 2 Year 1 $110,000 465,000 95,000 $102,000 Machinery Land 75,000