Question

Exercise 12-03 Oriole Corporation had the following transactions. 1. Sold land (cost $12,200) for $15,200. 2. Issued common stock at par for $20,000. 3. Recorded depreciation on buildings for $17,200. 4. Paid salaries of $9,200. 5. Issued 800 shares of $1 par value common stock for equipment worth $6,400. 6. Sold equipment (cost $11,000, accumulated depreciation $7,700) for $1,320.

Answer 1

Answer a. Account Titles and Explanation Transaction Debit Credit Cash 1. 15,200 Land 12,200 Gain on Disposal of Plant Assets 3,000 Cash 2. 20,000 Common Stock 20,000 Depreciation Expense Accumulated Depreciation Salaries and Wages Expense 17,200 17,200 4. 9,200 Cash 9,200 5. Equipment 6,400 Common Stock 800 Additional Paid-in Capital 5,600 Cash 6. 1,320 1,980 Loss on Disposal of Plant Assets Accumulated Depreciation 7,700 Equipment 11,000 Answer b. Cash receipt Gain on disposal of plant assets Cash receipt Depreciation expense Salaries and wages expense Common stock for equipment Cash flow from investing activities Cash flow from operating activities 1. 15,200 Increase 3,000 Decrease Cash flow from financing activities 2. 20,000 Increase 17,200 Cash flow from operating activities 3. Increase 4. 5. Cash receipt Cash flow from investing activities б. 1,320 Increase Loss on disposal of plant assets Cash flow from operating activities 1,980 Increase %24 %24 %24 %24 %24 %24 3.