[Aber97]

I just need help with understanding statement of cash flows, when you gain on a sale why is it negative on the statement.. For ex..
Company sold investment portfolios for $19,000 which resulted in a gain of $3,400 but on the statement its (3,400). Please explain, I've had people somewhat help me, but I'm still not grasping why its in brackets as a negative.

[ArcSine]

It's to avoid a double-counting of the 3,400.

The sale of the securities actually shows up in three places on the cash flow schedule. First, the entire proceeds of 19,000 is included among the cash inflows, or cash increases. Second, since the gain on sale (3,400) is part of the net income on the income statement, it's included in the net income figure as a cash increase on the cash flow schedule.

But note that if you stop there, you've double-counted the 3,400 on the cash flow schedule, since it's a part of the 19,000 total sales proceeds. Hence you need to deduct 3,400 elsewhere on the cash flow schedule to negate the double-counting.