Q35 what is accounting treatment of 10 percent investment and accured interest on 10 percent investment in cash flow under operating and investing activity
Dear Student
In cash flow from operating activity :
Accrued Interest would be deducted from net profit as it is non operating income.
In cash flow from Investing activity :
Cash Inflow of 20,000 would be recorded as investments of 20,000 are sold.
Therefore for this transaction :
Cash flow from operating activity = (10,000)
cash flow from Investing activity = +20,000
Regards
In cash flow from operating activity :
Accrued Interest would be deducted from net profit as it is non operating income.
In cash flow from Investing activity :
Cash Inflow of 20,000 would be recorded as investments of 20,000 are sold.
Therefore for this transaction :
Cash flow from operating activity = (10,000)
cash flow from Investing activity = +20,000
Regards