Schrade Company bought a machine for $96,000 cash. The estimated useful life was
ID: 2379706 • Letter: S
Question
Schrade Company bought a machine for $96,000 cash. The estimated useful life was four years, and the estimated residual value was $6,000. Assume that the estimated useful life in productive units is 120,000. Units actually produced were 43,000 in year 1 and 45,000 in year 2.
Indicate the effects of (a) acquiring the machine and (b) recording annual depreciation on the operating and investing activities sections of the statement of cash flows (indirect method) for year 1(assume the straight-line method). (Omit "$" sign in your response.)
Schrade Company bought a machine for $96,000 cash. The estimated useful life was four years, and the estimated residual value was $6,000. Assume that the estimated useful life in productive units is 120,000. Units actually produced were 43,000 in year 1 and 45,000 in year 2.
4.Indicate the effects of (a) acquiring the machine and (b) recording annual depreciation on the operating and investing activities sections of the statement of cash flows (indirect method) for year 1(assume the straight-line method). (Omit "$" sign in your response.)
(a) The machine acquisition would (Click to select)decreaseincrease cash provided by (Click to select)investingoperating activities by the (Click to select)depreciationpurchase cost of $ . (b) The depreciation cost would (Click to select)increasedecrease the cash provided by (Click to select)investingoperating activity by $ .Explanation / Answer
a. Decrease, investing, purchase, 96000
b. Increase, operating, 22500
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