Homework Answers
A) Book Value (at the time of sale) = Cost Of office equipment - Accumulated Depreciation
= $39580 - $35255
= $4325
B) Gain On sale = Sale Consideration of Asset - Book Value
= $6440 - $4325
= $2115
C) Sale Will Increase Net Income By $2115
D) Sale of office equipment will Decrease Total Assets by $39580 because generally Accumulated Depreciation is shown as negative figure in asset side.
E) Sale of Office equipment will Increase the Cash Inflow from Investing Activity section by $6445 and will Decrease the Operating Activity by $2115.
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Gutierrez Company reported net income of $190,400 for 2020.
Gutierrez also reported depreciation expense of $41,900 and a loss
of $4,600 on the disposal of plant assets. The comparative balance
sheet shows a decrease in accounts receivable of $14,400 for the
year, a $16,400 increase in accounts payable, and a $4,100 decrease
in prepaid expenses.
Prepare the operating activities section of the statement of cash
flows for 2020. Use the indirect method. (Show amounts
that decrease cash flow...
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