The T-accounts for Equipment and the related Accumulated Depreciation—Equip. for
ID: 2492839 • Letter: T
Question
The T-accounts for Equipment and the related Accumulated Depreciation—Equip. for Coldsmith Company at the end of 2014 are shown here.
Equipment
188,000
51,700
97,760
234,060
Accum. Depr.—Equip.
11,985
104,575
28,200
120,790
In addition, Coldsmith Company’s income statement reported a loss on the disposal of plant assets of $8,225. What amount was reported on the statement of cash flows as “cash flow from sale of equipment”?
Detailed explanation please :-)
Equipment
Beg. bal.188,000
Disposals51,700
Acquisitions97,760
End. bal.234,060
Accum. Depr.—Equip.
Disposals11,985
Beg. bal.104,575
Depr. exp.28,200
End. bal.120,790
Explanation / Answer
Solution: The statement of cash flows as “cash flow from sale of equipment”:
Purchase Value of disposed plant : $51,700
Less: Accumulated Depreciation
on disposed plant : $11,985
Less: Loss reported on disposal
of the plant : $8,225
Cash flow from sale of equipment: $31490
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