Financial Accounting, 8th Edition
Financial Accounting, 8th Edition
8th Edition
ISBN: 9780078025556
Author: Robert Libby, Patricia Libby, Daniel Short
Publisher: McGraw-Hill Education
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Chapter 12, Problem 13E

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 $ 1,500
Loss on sale of equipment 2,300
From the Balance Sheet
Beginning equipment 82,500
Ending equipment 72,000
Beginning accumulated depreciation 43,000
Ending accumulated depreciation 41,000

No new equipment was bought during the period.

Required:

  1. 1. For the equipment 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.)
  2. 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 computation of Net Cash Flows from Operating Activities?
  3. 3. What amount related to the sale would be added or subtracted in the computation of Net Cash Flows from Investing Activities?
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The following information is provided by Raynette's Pharmacy for the last quarter of its fiscal year ending on March 31, 20--: Cost Retail Inventory, start of the period, January 1, 20-- $ 33,700 $52,600 1,71,635 2,63,300 2,60,700 Net purchases during the period Net sales for the period 1. Estimate the ending inventory as of March 31 using the retail inventory method. 2. Estimate the cost of goods sold for the time period January 1 through March 31 using the retail inventory method.
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Financial Accounting, 8th Edition

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Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY