Computation of Cash Flows
an Analysis of Changes in Selected

question 105

Essay

Computation of cash flows
An analysis of changes in selected balance sheet accounts of Taurus Corporation shows the following for the current year:
The income statement for the current year included the following items relating to the transactions summarized above:
All payments and proceeds relating to these transactions were in cash. Using this information, compute the following cash flows for the current year:
$$\begin{array}{l}\text { Marketable securities account: }\\\begin{array} { | l | l | } \hline \text { Debit entries } & \$ 1,600,000 \\\hline \text { Credit entries } & \$ 1,000,000 \\\hline \text { Plant and equipment accounts: } & \\\hline \text { Debit entries to asset accounts } & \$ 3,600,000 \\\hline \text { Credit entries to asset accounts } & \$ 2,800,000 \\\hline \text { Debit entries to accumulated depreciation accounts } & \\\hline \text { (resulting from sales of plant assets) } & \$ 1,300,000 \\\hline \text { Credit entries to accumulated depreciation accounts } & \\\hline \text { (representing depreciation for the current year) } & \$ 500,000 \\\hline\end{array}\end{array}$$ $$\begin{array} { | l | l | } \hline \text { Loss on sales of marketable securities } & \$ 350,000 \\\hline \text { Gain on sales of plant assets } & \$ 650,000 \\\hline\end{array}$$ $$\begin{array} { | l | l | } \hline \text {(a) Purchases of marketable securities} & \$ \_\_\_\_\\\hline \text { (b) Proceeds from sales of marketable securities } &\$ \_\_\_\_ \\\hline \text {(c) Purchases of plant assets}&\$ \_\_\_\_\\\hline \text {(d) Proceeds from sales of plant assets }&\$ \_\_\_\_\\\hline\end{array}$$

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