Homework Answers
information given :
cost of office equipmennt = $36280
accumulated depreciation = $32438
sale of office equipmennt = $5460
a) book value of assets at the time of sale = cost of office equipmennt - accumulated depreciation
book value of assets at the time of sale = $36280 - $32438 = $3842
b) gain on the disposal = sale of office equipment - book value of office equipment at the time of sale
gain on the disposal = $5460 - $3842 = $1618
c) sale affect net income :
| ammount | effect | |
| net income | $1618 (gain) | increase |
d) sale affect the amount of total assets :
| amount | effect | |
| amount of total assets : | ||
| cost of office equipment | $36280 | decrease |
| less : accumulated depreciation | -$32438 | |
| book value of office equipment | $3842 |
e) event affect statement of cash flows :
| amount | effect | section | |
| cash flow | $1618 (gain) | outflow (deducted from net income) | operating activities |
| cash flow | $5460 (sale) | inflow | investing activities |
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