Reporting changes in Equipment on Statement of Cash Flows An analysis of the gen

Question

Reporting changes in Equipment on Statement of Cash Flows

An analysis of the general ledger accounts indicates that delivery equipment, which cost $80,000 and on which accumulated depreciation totaled $36,000 on the date of sale, was sold for $37,200 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 $80,000 cost of office equipment $36,000 accumulated depreciation $37,200 sales price $6,800 loss on sale of equipment
(assume the indirect method is used)

Explanation / Answer

Transaction Section of Statement of Cash Flows Added or Deducted $80,000 cost of office equipment Not reported $36,000 accumulated depreciation Not reported $37,200 sales price Investing Added $6,800 loss on sale of equipment Operating Added (assume the indirect method is used)

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