During the period, Sanchez Company sold some excess equipment at a loss. The fol

Question

During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the company’s accounting records:

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.)

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? (Input the amount as positive value.)

What amount related to the sale would be added or subtracted in the computation of Net Cash Flows from Investing Activities? (Input the amount as positive value.)

During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the company’s accounting records:

Explanation / Answer

1) Cost of asset sold = $20300-11000 = $9300 Accumulated depreciation of asset sold = $1980+870-$1750 = $1100 Cash received from sale = $9300-$1100-$2900 = $5300 2) Net Cash Flows from Operating Activities; Loss on sale of equipment = $2900 3) Net Cash Flows from Investing Activities; Cash from sale of equipment = $5300

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.