For each of the following separate transactions: Sold a building costing $38,500, with $23,400 of accumulated depreciation, for $11,400 cash, resulting in a $3,700 loss. Acquired machinery worth $13,400 by issuing $13,400 in notes payable. Issued 1,340 shares of common stock at par for $2 per share. Note payables with a carrying value of $41,700 were retired for $50,400 cash, resulting in a $8,700 loss. (a) Prepare the reconstructed journal entry. (b) Identify the effect it has, if any, on the investing section or financing section of the statement of cash flows.

Both requirements are solved below

Explanation:

REQUIREMENT A:

Sale of a building                        Debit      Credit

Cash                                           $11,400

Acc Depreciation                       $23,400

Loss on disposal                        $3700

Building                                                        $38,500

Acquisition of Machinery                   Debit      Credit

Machinery                                         $13,400

Notes                                                                  $13,400

Issuance of share                         Debit      Credit

Cash(1340x2)                            $2,680

Share Capital                                             $2,680

Retired Debt                        Debit         Credit

Note payable                      $41,700

Loss on retirement            $8,700

Cash                                                      $50,400

REQUIREMENT B:

Cash flow from investing activities

Gain on disposal of building                    $11,400

Net cash flow from investing activities    $11,400

Cash flow from financing activities

Cash received from issuing shares             $2,680

Cash paid for retirement of debt                 ($50,400)

Net cash flow from investing activities        ($47,720)

107x106 is the answer