What is the impact on cash from Sony sellinç its old Tokyo headquarters? In arch

Question

What is the impact on cash from Sony sellinç its old Tokyo headquarters? In arch 2014, Sony signed a deal to sell its old Tokyo headquarters and a nearby building for $156 million. This building served as Sony's headquarters from 1990 to 2007 and is thought of as the birthplace of the company, where Sony founders worked on the Walkman and Trinitron TV. This building sale follows the sale of Sony's New York and Osaka buildings in 2013. Sony has said that it expects a loss of $1.1 billion for its fiscal year 2014. Questions 1. Would the sale of the Tokyo buildings be a source of cash or a use of cash for Sony? 2. In which section of Sony's statement of cash flows for 2014 would the proceeds from the sale 3. In which section of Sony's statement of cash flows for 2014 would the operating loss be 4. of the Tokyo buildings be reported (operating, investing, or financing)? reported (operating, investing, or financing)? Do you think the sale of Sony buildings in 2013 and 2014 is related to its projected operating loss? Why or why not?

Explanation / Answer

1. Sale of building is a source of cash for Sony.

2.Sale of Building will be shown in Cash Flow from Investing Activities

3. Operating loss will be shown in Cash Flow from Operating activities

4. As Financial consideration, there will be no impact of sale of buildings in operating loss of the company.

However, as Non-Financial consideration, customers may think that company is in losses or going to shut down, this may be a reason for expected losses of Sony

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