Practice_problem_solutions_chap_4_and_5

# Practice_problem_solutions_chap_4_and_5 - SOLUTION 4.3 Cos...

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SOLUTION 4.3 1. Net book value = Cos t - Accumulated depreciation Accumulated depreciation = Cost - SV × 8 Number of years = 3,00 0 - 0 × 8 10 = \$ 2,400 NBV = 3,00 0 - 2,400 = \$ 600 2. Gain on sale = Proceeds from sales - NBV = 1,000 - 60 0 = \$ 400 3. Cash \$ 1,000 Accumulated depreciation \$ 2,400 Range \$ 3,000 Gain on sale of range \$ 400 4. Loss on sale = NBV - Proceeds from sales = 60 0 - 500 = \$ 100 Journal Entry Cash \$ 500 Loss on sale \$ 100 Accumulated depreciation \$ 2,400 Gain on sale of range \$ 3,000

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SOLUTION 4.4 1. Cash Flow from Operating Activities: Net Income \$ 100,000 Noncash Expenses Included in Income: Depreciation Expenses 30,00 0 Changes in Noncash Current Accounts: Accounts Receivable (2,00 0) Food Inventory (1,00 0) Prepaid Expenses 1,00 0 Accounts Payable (2,00 0) Accrued Payable 1,00 0 Income Taxes Payable 2,00 0 Net Cash Flow from Operating Activities \$ 129,000
SOLUTION 5.6 Part 1. a

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Practice_problem_solutions_chap_4_and_5 - SOLUTION 4.3 Cos...

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