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In: Accounting

An analysis of the general ledger accounts indicates that office equipment, which cost $202,500 and on...

An analysis of the general ledger accounts indicates that office equipment, which cost $202,500 and on which accumulated depreciation totaled $84,375 on the date of sale, was sold for $101,250 during the year.

Using this information, indicate the items to be reported on the statement of cash flows.

Transaction Section of Statement of Cash Flows Added or Deducted
$202,500 cost of office equipment
$84,375 accumulated depreciation
$101,250 sales price
$16,875 loss on sale of equipment
(assume the indirect method is used)

Solutions

Expert Solution

Working Notes:
Calculation of Gain or loss on Sale of Equipment
Cost of Equipment $                                                          202,500
Less: Accumulated Depreciation $                                                             84,375
Book Value of the Equipment $                                                          118,125
Less: Sales Value of the Equipment $                                                          101,250
Loss on Sales of Equipment $                                                             16,875
Solution:
Transaction Section of Statement of Cash Flow   Added or Deducted
$202,500 cost of office equipment Not Reported  
$84,375 accumulated depreciation Not Reported  
$101,250 sales price Cash Flow From investing activities   Added
$16,875 loss on sale of equipment Cash Flow From operating Activities   Added

ekkarill92 answered 1 year ago
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