Exercise 23-18 The accounts below appear in the ledger of Anita Baker Company. R
ID: 2483778 • Letter: E
Question
Exercise 23-18
The accounts below appear in the ledger of Anita Baker Company.
Retained Earnings
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Cr.
Bal.
Equipment
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Bal.
Accumulated Depreciation—Equipment
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Bal.
From the postings in the accounts above, indicate how the information is reported on a statement of cash flows by preparing a partial statement of cash flows using the indirect method. The loss on sale of equipment (November 15) was $6,790. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
ANITA BAKER COMPANY
Statement of Cash Flows (Partial)
For the Year Ended December 31, 2014
XXX
$XXX
Link to Text
Link to Text
Retained Earnings
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Bal.
Jan. 1, 2014 Credit Balance $42,640 Aug. 15 Dividends (cash) $14,600 28,040 Dec. 31 Net Income for 2014 $50,620 78,660Equipment
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Jan. 1, 2014 Debit Balance $140,400 Aug. 3 Purchase of Equipment $61,970 202,370 Sept. 10 Cost of Equipment Constructed 48,920 251,290 Nov. 15 Equipment Sold $66,330 184,960Accumulated Depreciation—Equipment
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Jan. 1, 2014 Credit Balance $83,360 Apr. 8 Extraordinary Repairs $21,240 62,120 Nov. 15 Accum. Depreciation on Equipment Sold 24,460 37,660 Dec. 31 Depreciation for 2014 $17,510 55,170Explanation / Answer
ANITA BAKER COMPANY Statement of Cash flows (Partial) For the Year Ended December 31, 2014 Cash flow from Operating activities Net Income $50,620.00 (+) Loss on sale of equipment $6,790.00 (+) Depreciation for 2014 $17,510.00 Net Cash flow from operating activities $74,920.00 Cash flow from Financing activities Payment of dividend -$14,600.00 Net Cash flow from financing activities -$14,600.00 Cash flow from Investing activities Purchase of equipment -$61,970.00 Cost of Equipment Constructed -$48,920.00 Equipment Sold $66,330.00 Loss on sale of equipment -$6,790.00 Extraordinary Repairs -$21,240.00 Net Cash flow from Investing activities -$72,590.00 Net Increase / (Decrease) in Cash flow -$12,270.00
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