Blue co. sold plant assets costing $15,000 with accumulated depreciation of $10,000 for $7,000. as a result, blue co will report on the statement of cash flows in the cash flows from investing activities section.

Blue Co will report a loss of $18,000 on the statement of cash flows in the cash flows from investing activities section.

Explanation:

Step 1: Determine the total cost of the asset

The total cost can be expressed as;

T=A+D

where;

T=total cost of the asset

A=asset purchase cost

D=accumulated depreciation

In our case;

T=unknown

A=$15,000

D=$10,000

replacing;

T=15,000+10,000=$25,000

Total cost of the asset=$25,000

Step 2: Determine the cash flow after the sale

This can be expressed as;

Cash flow=selling price-total cost of the asset

where;

selling price=$7,000

total cost of the asset=$25,000

replacing;

Cash flow=7,000-25,000=-$18,000

Blue Co will report a loss of $18,000 on the statement of cash flows in the cash flows from investing activities section.

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

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