How do proceeds from the sale of PPE impact Declan's Designs' 2022 Statement of Cash Flows? Question 24 options: The proceeds from the sale of PPE are added in Cash Flows from Financing The proceeds from the sale of PPE are subtracted in Cash Flows from Financing The proceeds from the sale of PPE are added in Cash Flows from Investing The proceeds from the sale of PPE are subtracted in Cash Flows from Operations The proceeds from the sale of PPE are subtracted in Cash Flows from Investing The proceeds from the sale of PPE are not included on the Statement of Cash Flows The proceeds from the sale of PPE are added in Cash Flows from Operations Declan's Designs Balance SheetDeclan's Designs Income StatementASSETS12/31/202112/31/2022For the Year EndingCurrent Assets12/31/2022Cash and Cash EquivalentsAccounts Receivable, NetMerchandise InventoryTotal Current Assets$90,00097,000400,000587,000$294,000101,000475,000870,000Sales Revenue$225,000(16,000)209,000(22,000)187,000(12,000)(5,000)170,000(7,000)$163,000CGSGross MarginSG&APPE, NetGoodwill, Net62,000600,000$1,249,00070,000600,000$1,540,000Operating IncomeInterest ExpenseTotal AssetsLoss on Sale of PPEPre-Tax IncomeIncome Tax ExpenseLIABILITIES & SHAREHOLDERS' EQUITYCurrent LiabilitiesAccounts PayableInterest PayableDividends PayableNet Income26,0003,00020,00049,00017,0005,00010,00032,000Additional Information regarding Declan's Designs' 12/31/22 financials:Total Current LiabilitiesMortgage PayableLong-Term Bank LoanTotal LiabilitiesPROPERTY, PLANT & EQUIPMENTPPE is shown net accumulated depreciation. Accumulated depreciation was $18,000 at the beginning ofthe year and $20,000 at the end of the year. Depreciation expense for the year was $3,000, which isincluded in SG&A. New PPE was bought during the year for $22,000 (in cash).500,000500,000200,000732,000549,000Shareholder's EquityNote: You may use the worksheet provided on the last page to help you prepare the Cash Flow Statement.Preferred StockCommon StockHint #1: The most recent year is not always in the left column.Additional Paid in CapitalRetained EarningsTotal Shareholder’s Equity8,00054,000638,000700,00010,00060,000738,000808,000Hint #2: Evaluate changes in gross PPE separate from changes in accumulated depreciation. Recall grossPPE less accumulated depreciation equals net PPE.Hint #3: Never “plug" the annual change in gross PPE. Separately evaluate the increase in gross PPE(capital expenditures) from the annual decrease in gross PPE (sale of PPE).Total Liabilities &Shareholders’ Equity$1,249,000$1,540,000Hint #4: The total change in cash due to stock issuances/repurchases is the sum of the change in commonstock (stated par value) and additional paid in capital (APIC).Hint #5: Dividends declared (the decrease in RE) is not the same as dividends paid (the decrease individends payable). To find dividends paid, set up your dividends payable account with the beginning andending balances from the balance sheet. Increase dividends paid by the amount of dividends declared.Then plug for the decrease in dividends payable (which represents dividends paid).

Investing Activities - All the Purchase sales of assets are included under this section.

Answered: How do proceeds from the sale of PPE…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

	The proceeds from the sale of PPE are added in Cash Flows from Financing
	The proceeds from the sale of PPE are subtracted in Cash Flows from Financing
	The proceeds from the sale of PPE are added in Cash Flows from Investing
	The proceeds from the sale of PPE are subtracted in Cash Flows from Operations
	The proceeds from the sale of PPE are subtracted in Cash Flows from Investing
	The proceeds from the sale of PPE are not included on the Statement of Cash Flows
	The proceeds from the sale of PPE are added in Cash Flows from Operations