ACC 206 Week 1 Problem 4 Equipment transaction and cash flow reporting (Updated October 2013).

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Equipment transaction and cash flow reporting

Property, plant & equipment             Dec. 31, 20X8                  Dec. 31, 20X7

Land                                                             $72,000                               $72,000

Equipment                                                   630,000                                520,000

 Less: Accumulated depreciation               -308,000                           -325,000

 New equipment purchased during 20×8 totaled $175,000. The 20×8 income statement disclosed equipment depreciation expense of $34,000 and a $2,000 loss on the sale of equipment.

 a. Determine the cost and accumulated depreciation of the equipment sold during 20X8.

b. Determine the selling price of the equipment sold.

c. Show how the sale of equipment would appear on a statement of cash flows prepared by using the

indirect method.