Proceeds from the sale of equipment by Perkins Nonprofit were $100. The equipment had a historical cost of $500 and accumulated depreciation of $375. Show which section of the statement of cash flows (using the indirect method) where amounts related to this transaction would appear, including direction and amount.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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**Examining Cash Flow Impacts in Nonprofit Accounting**

Proceeds from the sale of equipment by Perkins Nonprofit were $100. The equipment had a historical cost of $500 and accumulated depreciation of $375. 

**Understanding the Statement of Cash Flows:**

This exercise will help you see how various transactions impact the statement of cash flows, specifically using the indirect method.

**Indirect Method in the Statement of Cash Flows:**

Here, the focus is to identify where amounts related to the sale of equipment would appear, including their direction (increase or decrease) and the amounts.

1. **Historical Cost of Equipment**: $500
2. **Accumulated Depreciation**: $375
3. **Proceeds from Sale**: $100

By analyzing these figures, you will understand the impact on the statement of cash flows and how each component is reported.

For further practice, consider additional cases and how they integrate within financial documentation. Use tools and resources provided to ensure comprehensive knowledge and application.

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**Explanation Note**: If included in an educational setting, this content would provide clarity on handling specific transactions within nonprofit financial management, contributing to a better understanding for students.
Transcribed Image Text:**Examining Cash Flow Impacts in Nonprofit Accounting** Proceeds from the sale of equipment by Perkins Nonprofit were $100. The equipment had a historical cost of $500 and accumulated depreciation of $375. **Understanding the Statement of Cash Flows:** This exercise will help you see how various transactions impact the statement of cash flows, specifically using the indirect method. **Indirect Method in the Statement of Cash Flows:** Here, the focus is to identify where amounts related to the sale of equipment would appear, including their direction (increase or decrease) and the amounts. 1. **Historical Cost of Equipment**: $500 2. **Accumulated Depreciation**: $375 3. **Proceeds from Sale**: $100 By analyzing these figures, you will understand the impact on the statement of cash flows and how each component is reported. For further practice, consider additional cases and how they integrate within financial documentation. Use tools and resources provided to ensure comprehensive knowledge and application. --- **Explanation Note**: If included in an educational setting, this content would provide clarity on handling specific transactions within nonprofit financial management, contributing to a better understanding for students.
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