Brief Exercise 13-7 The T-accounts for Equipment and the related Accumulated Dep
ID: 2536626 • Letter: B
Question
Brief Exercise 13-7
The T-accounts for Equipment and the related Accumulated Depreciation—Equipment for Luo Company at the end of 2017 are shown here.
Equipment
75,600
21,800
45,500
99,300
Accumulated Depreciation—Equipment
8,000
44,700
11,500
48,200
In addition, Luo Company’s income statement reported a loss on the disposal of equipment of $7,000. What amount was reported on the statement of cash flows as “cash flow from sale of equipment”? (Show an amount that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Equipment
Beg. bal.75,600
Disposals21,800
Acquisitions45,500
End. bal.99,300
Accumulated Depreciation—Equipment
Disposals8,000
Beg. bal.44,700
Depr. exp.11,500
End. bal.48,200
Explanation / Answer
Cash flow from sale of equipment = (21800-8000)-7000= $6800
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