An analysis of the income statement and the balance sheet accounts of Hayes Export Co. at December 31, 2011 provides the following information:

Income statement items:

Gain on Sale of Plant Assets $ 12,000

Loss on Sales of Marketable Securities 16,000

Analysis of balance sheet accounts:

Marketable Securities account:

Debit entries $ 78,000

Credit entries 62,000

Notes Receivable account:

Debit entries 55,000

Credit entries 60,000

Plant and Equipment accounts:

Debit entries to plant asset accounts 150,000

Credit entries to plant asset accounts 140,000

Debit entries to accumulated depreciation accounts 100,000


Except as noted in 4 below, payments and proceeds relating to investing transactions were made in cash.


The marketable securities are not cash equivalents.


All notes receivable relate to cash loans made to borrowers, not to receivables from customers.


Purchases of new equipment during the year ($150,000) were financed by paying $50,000 in cash and issuing a long-term note payable for $100,000.


Debits to the accumulated depreciation accounts are made whenever depreciable plant assets are sold or retired. Thus, the book value of plant assets sold or retired during the year was $40,000 ($140,000 – $100,000).



Prepare the investing activities section of a statement of cash flows. Show supporting computations for the amounts of (1) proceeds from sales of marketable securities and (2) proceeds from sales of plant assets. Place brackets around amounts representing cash outflows.


Prepare the supplementary schedule that should accompany the statement of cash flows in order to disclose the noncash aspects of the company’s investing and financing activities.


Does management have more control or less control over the timing and amount of cash outlays for investing activities than for operating activities? Explain.