Test: CPA Financial Accounting and Reporting (FAR)

1.

A building is bought on August 1, Year 1, for $400,000 and is depreciated using the straight-line method over a life of 20 years with an expected residual value of $40,000. The half-year convention is elected. On April 1, Year 3, the building is sold for a loss of $30,000. What appears on the company's year 3 statement of cash flows?

Operating activities cash inflow of $364,000

Operating activities cash inflow of $325,000

Investing activities cash inflow of $370,000

Investing activities cash inflow of $334,000

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