45000 machinerypurchased b 2012endingmachinery

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Unformatted text preview: flows from investing activities: Proceeds from sale of marketable securities 25,000 Purchase of equipment $ (12,000) (40,000) (5,000) Net cash increase due to operating $ $ (5,000) Net cash increase due to investing activities 20,000 Cash flows from financing activities: Proceeds from issue of common stock Dividend payment activities Net increase in cash 42,000 Beginning cash balance, January 1, 2012 25,000 Ending cash balance, December 31, 2012 67,000 $ 6,000 (2,000) Net cash increase due to financing 4,000 $ $ E14–10 Insurance 2012 Ending prepaid insurance = 2012 Beginning prepaid insurance + Insurance purchases during 2012– 2012 Insurance expense = $4,200 + Insurance purchases – $3,000 = $5,800 $7,000 Insurance purchases Wages 2012 Ending wages payable = $6,000 Wages paid = = 2012 Beginning wages payable + 2012 Wage expense – Wages paid during 2012 $0 + $8,500 – Wages paid $2,500 E14–11 a. = $45,000 Machinery purchased b. 2012 Ending machinery = = 2012 Beginning machinery + Cost of machinery purchased during 2012 – Cost of machinery sold during 2012 $20,000 + Machinery purchased – $8,000 $33,000 When the machinery was sold during 2012, Dylan’s Toys, would prepare the appropriate entry using the following format. Cash (+A) Accumulated Depreciation (+A) Machinery (–A) Gain on Sale of Machinery (Ga, +SE) XX XX XX XX We can find the cash collected for the sale of the machinery by first calculating the other three amounts. Machinery It is given in the exercise that the cost of the machinery sold was $8,000. Gain on Sale of Machinery It is given in the exercise that the gain on the sale was $2,000. Accumulated Depreciation 2012 Ending accumulated depreciation = $15,000 = Accumulated depreciation on items sold = 2012 Beginning accumulated depreciation + 2012 Depreciation expense – Accumulated depreciation on items sold $10,000 + $7,000 – Accumulated depreciation on items sold $2,000 From the entry given above, Cash = Cost of machinery sold + Gain on sale of machinery – Accumulated depreciation on machinery sold = $8,000 + $2,000 – $2,000 = $8,000 c. Cash (+A) Accumulated Depreciation (+A) Machinery (Ga, +SE) 8,000 2,000 Machinery (–A) 8,000 Gain on Sale 2,000 Sold machinery. E14–12 Cash Receipts Cash Payments 12/31/07 accounts receivable 138 2008 Sales $ 965 Change in payables (‘07­‘08) 44,564 2008 cost of sales 34,451 $ of 12/31/08 accounts receivable 2008 cash receipts $ 34,522 (887) Change in inventory (‘08...
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