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CFO given the following information, a bit stumped

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    • Avatar of malkadhimalkadhi
      Participant
        16 Jan 2018 at 8:01 am
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        So I was working through some of the practice questions, and I don’t know why they didn’t take into consider loss on equipment sale as an outflow. Question is as follows:

        Proceeds from sale of
        equipment: 32000

        Loss on equipment sale:
        9000

        Dividends paid: 12500

        Purchase of office
        premises: 100000

        Common Stock
        repurchases: 45000

        Dividends received:
        8500

        Interest received: 1200

        Supplier accounts paid:
        3700

        Cash collections from
        customers: 14200

        Ending Cash balance:
        98000

        Answer:

        CFI=32000-100000=-68000

      • Avatar of simply_complex2simply_complex2
        Participant
          • CFA Level 1
          16 Jan 2018 at 8:07 am
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          gains or losses on sales of equipment are non cash charges (they are just the difference between what the asset is recorded on the balance sheet and the cash the company gets paid for the asset) so they generally aren’t reported on the cash flow statement. instead you’d see proceeds from the sales on the CF statement

        • Avatar of malkadhimalkadhi
          Participant
            16 Jan 2018 at 8:34 am
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            Thanks! Completely spaced out on that one.

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