During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the company's accounting records:
From the Income Statement
Loss on sale of equipment 3,800
From the Balance Sheet Beginning equipment 20,400
Ending equipment 11,400
Beginning accumulated depreciation 1,860
Ending accumulated depreciation 1,810
No new equipment was bought during the period.
1. For the equipment that was sold, determine its original cost, its accumulated depreciation, and the cash received from the sale. (Use the equipment and accumulated depreciation T-accounts to infer the book value of the equipment sold.)
2. Sanchez Company uses the indirect method for the Operating Activities section of the cash flow statement. What amount related to the sale would be added or subtracted in the computation of Net Cash Flows from Operating Activities?
3. What amount related to the sale would be added or subtracted in the computation of Net Cash Flows from Investing Activities?
1) Accumulated Depreciation On Equipment Sold = $1060 Cash Proceeds From sale of equipment = $4140 Total Cost Of The... View the full answer