he period, Sanchez Company sold some excess equipment at a loss. The following information wa y's accounting records: he Income Statenent ciation expense on sale of equipment he Balance Sheet ning equipment equipment ning accumulated depreciation accumulated depreciation 990 4,000 19,100 11,800 1,950 1,790 equipment was bought during the perlod. d: e equloment that was solci determine Ite oricinal coet ite accumulated denreciation and the cach
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
please show formulas and work for each answer. please calculate cash received from sale
![During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the
company's accounting records:
From the Income Statement
Depreciation expense
Loss on sale of equipment
From the Balance Sheet
Beginning equipment
Ending equipment
Beginning accumulated depreciation
Ending accumulated depreciation
990
4, 000
19,100
11,800
1,950
1,798
No new equipment was bought during the period.
Required:
1. For the equlpment 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.)
Cost of oquipment sold
7,300
Accumulated depreciation on sold equipment
1,150
Cash received from sale
2. 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
value.)
tion of Net Cash Flows from Operating Activities?(Input the amount as positive
The
loss
2$
4,000 would be
added
3. 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.)
The cash
inflow
Ewould be
added](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7e196737-2f98-406f-b4c7-e6f1c9fab596%2F5d8a4aff-cc3c-4d63-b019-1d8d86416861%2Flny1bb_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)