On January 1, 2016, Bacco Company had a balance of $76,100 in its Delivery Equip

Question

On January 1, 2016, Bacco Company had a balance of $76,100 in its Delivery Equipment account. During 2016, Bacco purchased delivery equipment that cost $24,500. The balance in the Delivery Equipment account on December 31, 2016, was $76,861. The 2016 income statement reported a gain from the sale of equipment for $3,500. On the date of sale, accumulated depreciation on the equipment sold amounted to $14,500 Re Bifermine the original cost of the equipment that was sold during 2016. a. Determine the original cost of the equipment that was sold during 2016. Cost of the equipment b. Determine the amount of cash flow from the sale of delivery equipment that should be shown in the investing activities section of the 2016 statement of cash flows. mount of cash flow

Explanation / Answer

a) Equipment 1-Jan 76,100 sold cost 23,739 purchased 24,500 end bal 76,861 cost of the Equipment 23,739 b) cost of the Equipment sold 23,739 less Accumulated depreciation -14,500 Book value on date of sale 9,239 Add:gain on sale of Equipment 3,500 Cash from sale of Equipment 12,739 amount of cash flow 12,739

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