Act_3392_Chp_23_Homework_Solutions

Act_3392_Chp_23_Homework_Solutions - Intermediate...

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Intermediate Accounting II Amanda N. Paul, CPA, MBA Troy University
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Chapter 23 EXERCISE 23-1 (a) Investing activity. (b) Financing activity. (c) Investing activity. (d) Operating—add to net income. (e) Significant noncash investing and financing activity. (f) Financing activity. (g) Operating—add to net income. (h) Financing activity. (i) Significant noncash investing and financing activity. (j) Financing activity. (k) Operating—deduct from net income. (l) Operating—add to net income.
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EXERCISE 23-2 (a) Plant assets (cost) $20,000 Accumulated depreciation ([$20,000 ÷ 10] X 6) 12,000 Book value at date of sale 8,000 Sale proceeds (5,300 ) Loss on sale $ 2,700 The loss on sale of plant assets is reported in the operating activities section of the statement of cash flows. It is added to net income to arrive at net cash provided by operating activities. The sale proceeds of $5,300 are reported in the investing activities section of the statement of cash flows as follows: Sale of plant assets $5,300 (a) Shown in the financing activities section of a statement of cash flows as follows: Sale of common stock $430,000 (a) The write-off of the uncollectible accounts receivable of $27,000 is not reported on the statement of cash flows. The write-off reduces the Allowance for Doubtful Accounts balance and the Accounts Receivable balance. It does not affect cash flows.
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This note was uploaded on 04/07/2009 for the course ACT 3392 taught by Professor Paul during the Spring '08 term at Troy.

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Act_3392_Chp_23_Homework_Solutions - Intermediate...

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