12. Patton Corp. reported net income of $420,000 for 2017. Changes occurred in s
ID: 2568112 • Letter: 1
Question
12. Patton Corp. reported net income of $420,000 for 2017. Changes occurred in several balance sheet as follows: Equipment Accumulated depreciation Note $35,000 increase 56,000 increase 42,000 increase Additional information: During 2017, Patton sold equipment costing $35,000, with accumulated depreciation of $16,800, for a gain of $7,000. In December 2017, Patton purchased equipment costing $70,000 with $28,000 cash and a l 2% note payable of $42,000. Depreciation expense for the year was $72,800. In Patton's 2017 statement of cash flows, net cash used in investing activities should be a. $49.000. b. $30,800. c. $2,800. d. $16,800. 13. Which of the following accounts would not be affected if a company failed to report returns of merchandise sold? a. Cost of goods sold b. Sales allowances c. Sales returns d. Inventory Denver Company's prepaid rent was $40,000 at December 31, 2017, and $15,000 at December 31, 2016. Denver's income statement for 2017 reported rent expense as $10,000. What amount of cash disbursements for rent would be reported in Denver's net cash flows from operating activities for 2017 presented on a direct basis? a. $10,000 b. $45,000 c. $20,000 d. $35,000 14. Net income for Edison Company for 2017 includes the effect of the following transactions involving the sale of fixed assets: 15. Sales Price S 20,000 25,000 Asset Cost S 80,000 S 150,000 $ 10,000 S (18,000) Purchases of fixed assets during 2017 amounte to $340,000. The Accumulated Depreciation account increased $40,000 during 2017. How much was depreciation expense for 2017 a. $217,000 b. $40,000 c. $32,000 d. $270,000Explanation / Answer
12
72800 - (35000 + 28000 + gain 7000 ) = 2800
so answer is c.$2800
13..
answer is b. sales allowances
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