The following selected account balances relate to the property, plant, and equipment accounts of Katewill Inc.:

Additional information:
1. Purchased $40,000 of land for cash.
2. Purchased $75,000 of equipment for a $10,000 down payment, financing the remainder with a bank loan. Equipment was also sold during the year.
Instructions
(a) Calculate any cash inflows or outflows related to the property, plant, and equipment accounts in 2012.
(b) Indicate where each of the cash inflows or outflows identified in (a) would be classified on the statement of cash flows or accompanying notes.
(c) Would you expect a growing company to be generating or using cash for its investing activities? Explain.

Transcribed Image Text:

2012 337,500 144,000 37,500 60,000 100,000 750,000 300,000 2011 Accumulated depreciation-buildings Accumulated depreciation-equipment Depreciation expense-buildings Depreciation expense-equipment Land Buildings Equipment Gain on sale of equipment $300,000 96,000 37,500 48,000 60,000 750,000 240,000 5,000