Select financial information for Logistical Corp. as at December 31, 20X6, follows: Please find the attached image Additional information is as follows: • During the year, Logistical sold equipment for proceeds of $50,000. The equipment had a cost of $80,000 and accumulated depreciation of $35,000. • During the year, a review of Logistical’s goodwill was completed, and it was determined that the asset was impaired and should be written down by $3,000. • Logistical did not purchase any additional investments in the year. Any changes in the fair value of investments have been adjusted through other comprehensive income. These securities are not cash equivalents. • During the year, a new lease was signed for equipment that had a fair market value of $45,000. Depreciation expense for the year totalled $1,000. The new lease was signed in the year, which required a $7,000 payment at the start of the lease. • Logistical elects to classify any interest paid and dividends paid as financing activities. During the year, Logistical declared dividends of $5,620. What is the net cash from operating activities for the year ended December 31, 20X6? a) $30,120 b) $33,120 c) $35,520 d) $42,500
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.
Select financial information for Logistical Corp. as at December 31, 20X6, follows:
Please find the attached image
Additional information is as follows:
• During the year, Logistical sold equipment for proceeds of $50,000. The equipment had a cost of $80,000 and
• During the year, a review of Logistical’s
• Logistical did not purchase any additional investments in the year. Any changes in the fair value of investments have been adjusted through other comprehensive income. These securities are not cash equivalents.
• During the year, a new lease was signed for equipment that had a fair market value of $45,000. Depreciation expense for the year totalled $1,000. The new lease was signed in the year, which required a $7,000 payment at the start of the lease.
• Logistical elects to classify any interest paid and dividends paid as financing activities. During the year, Logistical declared dividends of $5,620.
What is the net cash from operating activities for the year ended December 31, 20X6?
a) $30,120
b) $33,120
c) $35,520
d) $42,500
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