Question

I received an answer on my Cadh Flow problem. the answer that I received was Equipment was (5300). i was reading the answer and I was confused. It said that the opening balance for Equipment was $8,000. That was the closing balance for 2016. In 2017 their was a purchase of $6,000 making the opening balance for 2017 as $14,000. There was a loss of equipment for $2,000. Accumulated Dep. for $1.200, Other Receivable -Insurance $700 from the insurance which will be paid in January and a $100 loss. If the

Payton Approved Statement of cash flow For Year Ended 12/31/2017 Net Income Depreciation Expense Loss on Disposal of Equipment 176,476 10 077.00 100.00 17025404 Increase in Accounts Receivable Increase in Others Receivables Insurance Increase in Baking Supplies Increase in Merchandise inventory Increase in Consignment Inventory Increase in Prepaid Rent Increase in Prepaid Insurance Increase in Misc. Supplies Increase in Accounts Payable Increase in Wages Payable Increase in Interest Payable Increase in Customer Deposit (25.0691) (700.00) (11,362.14) (243.10) (200.00) (440.55) (1,004 65) (114.90) 6.467.11 1,850 48 44 66 1,000.00 Operating Cash Flow 146,654 65 Cash Flow from Investments Equipment Purchases (4,000.00) Cash Flow from Investments (4,000.00) Cash Flow from Financing Dividends Paid (10,000.00) (105,000,00) Cash Flow from Financing (115,000 00) Net Cash Flow 26,654 85 Beginning Cash 43,165.39 Ending Cash 88,520.04 1.300.00 0

adjusted Trial Balance shows $12,000. Why was the 2016 balance of $8,000 use

d instead of the 2017 balance of $12,000.

I hope I got all.of the Statements.

i see from the previous response that the equipment on the Cash Flow sheet is ($5,300). Can you explain how they got this answer.

Answer 1

	Beginning balance of baking equipment in Jan 1, 2017	8,000.00
Add:	Purchase of equipment	6,000.00
Less:	Cost of equipment disposal ((8000+6000)-12000)	(2,000.00)
	Ending balance of baking equipment in Dec 31, 2017	12,000.00

	Accumulated depreciation balance as of Jan 1, 2017 (From 2016 balance)	928.58
Add:	Depreciation expense	677.86
Less:	Accumulated depreciation of disposal equipment	(1,200.00)
	Accumulated depreciation balance as of Dec 31, 2017	406.44

.	Treatment of Cost of equipment disposal of $2,000 is classified into 3 different amounts.
1200	This amount is for accumulated depreciation of disposal equipment. This is recorded under the accumulated depreciation account.
700	This amount is recorded in other receivable. The increase in other receivable by $700 reported under the operating activities.
100	This is loss on disposal of equipment. This would be added to the operating cash flows. Because this is not operating activities.
2000	Total amount of cost f disposal of equipment.

Correct answer:- Cash payment for Purchase of equipment would be $6,000 if the all equipment purchased in cash.

Your another question: - Can you explain how they got this answer of $5,300.

They might get wrong answer of $5,300, which is deducted the purchase of equipment of $6,000 by deduct the other receivable of $700 from insurance company (They consider the all amount received from insuransunce comoany. And records the following two amounts.

Cash payment for purchase of equipment	(6,000)
Cash receipts from isurance	700
Cash flows (used by) the investing activities.	(5,300)