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Computation of Cash Flows
an Analysis of Changes in Selected

Question 21

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

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(a) $1,600,000 (debit entries ...

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