Reporting Land Transactions on Statement of Cash Flows On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 802,000 Mar. 12 Purchased for cash 257,000 1,059,000 Oct. 4 Sold for $141,000 121,000 938,000 Item Section of Statement of Cash Flows Added or Deducted Amount Mar. 12: Purchase of fixed asset $fill in the blank 3 Oct. 4: Sale of fixed asset $fill in the blank 6 Gain on sale of fixed asset (assume the indirect method) $fill in the blank 9
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Reporting Land Transactions on Statement of
On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows:
| ACCOUNT Land | ACCOUNT NO. | |||||||||
| Balance | ||||||||||
| Date | Item | Debit | Credit | Debit | Credit | |||||
| Jan. | 1 | Balance | 802,000 | |||||||
| Mar. | 12 | Purchased for cash | 257,000 | 1,059,000 | ||||||
| Oct. | 4 | Sold for $141,000 | 121,000 | 938,000 |
| Item | Section of Statement of Cash Flows |
Added or Deducted | Amount |
| Mar. 12: Purchase of fixed asset | $fill in the blank 3 | ||
| Oct. 4: Sale of fixed asset | $fill in the blank 6 | ||
| Gain on sale of fixed asset (assume the indirect method) | $fill in the blank 9 |
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