Depreciation expense Gain on sale of plant assets 60,600 (2,200) Changes in curr

Question

Depreciation expense Gain on sale of plant assets 60,600 (2,200) Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses (15,000) 23,700 1,200 Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (6,000) (9,200) (600) 156,010 ash flows from investing activities 52,800 Cash received from sale of equipment Cash paid for equipment 52,800 105,600 ash flows from financing activities Cash received from stock issuance Cash paid to retire notes Cash paid for dividends 62,000 (30,000) 32,000

Explanation / Answer

Cash paid for Dividend: Beginning Bbalanc eof retained earnings 24700 Add: Net income 103510 Balance which should have been existed 128210 Less: Ending balance in Retained earnings 49900 Dividend paid 78310 Cash paid for equipment 59600 (Given in the Question itself Point-c) Cash received from Sale of Machinery: Accumulated depreciation on sold machinery: Beginning balance in Acc. Dep 10000 Add: Current year depreciation 60600 Less: Ending balance in Accumulated depreciation -28000 Accumulated depreciation on sold machinery: 42600 Now, Cost of Machinery sold 50600 Less: Accumulated depreciation on sold machinery -42600 Book value of Machinery sold 8000 Add: gain on sale of machinery 2200 Sale value received on sold machinery 10200

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