. The following information pertains to Todd’s Painting Company for 2015. Decrea
ID: 2480497 • Letter: #
Question
. The following information pertains to Todd’s Painting Company for 2015.
Decrease in Accounts Receivable
12,000
Decrease in Inventory
3,500
Increase in Buildings
90,000
Increase in Prepaid Expenses
3,000
Depreciation Expense
23,000
Increase in Accounts Payable
14,000
Decrease in Accrued Expenses Payable
2,000
Increase in Supplies
6,000
Increase in Bonds Payable
80,000
Net Income
125,000
In addition, equipment was sold for $18,000 cash, which had an original cost of $120,000 and accumulated depreciation of 112,000. What is the total Net Cash provided by operating activities for 2015?
What journal entry would be required to show the sale of equipment?
Decrease in Accounts Receivable
12,000
Decrease in Inventory
3,500
Increase in Buildings
90,000
Increase in Prepaid Expenses
3,000
Depreciation Expense
23,000
Increase in Accounts Payable
14,000
Decrease in Accrued Expenses Payable
2,000
Increase in Supplies
6,000
Increase in Bonds Payable
80,000
Net Income
125,000
Explanation / Answer
Cash Flows from Operating Activities: Operating Income (EBIT) $125,000 Depreciation Expense $23,000 Profit on Sale of Equipment[W.N 1] $10,000 Increase in Prepaid Expenses ($3,000) Increase in Accounts Payable $14,000 Increase in Supplies ($6,000) Decrease in Accounts Receivable $12,000 Decrease in Inventory $3,500 Net Cash Flow from Operating Activities $178,500 Loss on Sale of Equipment B.V os Asset Cost of Asset $120,000 Less: Acc. Dep $112,000 BV of Asset $8,000 Profit on Sale of Asset Seling Price 18000 Less: B.V $8,000 $10,000 JE Cash A/c Dr 18000 Accumulated DepA/c Dr $112,000 To Equipment $120,000 To Profit on sale of equipment $10,000
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