Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 22, Problem 22.23BE
Complex Transactions, Acquisitions and Dispositions of Long-Term Assets. During the year Big Ben Corporation sold equipment for $2,000 The equipment's cost was $25,000 and
Net income for the year was $53,000.
Required
- a. What is the gain or loss on the sale of equipment?
- b. What are the operating and investing
cash flows for the company? Use the indirect method.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Assume a company did not purchase any equipment during the year, but it did sell a piece of equipment that had an original cost of $500,000 and accumulated depreciation of $300,000. The gain on the sale was $25,000. Based solely on the information provided, the company’s net cash provided by (used in) investing activities would be:
Multiple Choice
$200,000.
$225,000.
$250,000.
$275,000.
5. During the end of the year, YGX Company presented the following
information:
Equipment
Accumulated depreciation
However, the equipment is found to be impaired due to obsolescence
as well as physical damage. At year-end, the company has determined
the following information related to the equipment:
Undiscounted net cash inflows
Fair value less cost of disposal
Value in use or discounted net cash inflows
a. 1,500,000
b. 2,000,000
9,000,000
3,500,000
What amount should be reported as impairment loss for the year?
c. 500,000
d. 0
4,500,000
3,500,000
3,000,000
Additional information
(a) The entity sold some tangible non-current assets, which had a net book value of $200 million. The cost of sales figure includes a loss of $10 million on this disposal.
(b) Cost of sales is arrived at after charging depreciation on the tangible non-current assets of $42 million.
(c) Dividends paid during the year were $55,000.
IMPORTANT: if your answer is 100,000 for this question please write 100 and IGNORE 000 while writing answer. If you write answer with 000 it will be marked as incorrect
Find cashflow from Operations
Chapter 22 Solutions
Intermediate Accounting
Ch. 22 - Prob. 22.1QCh. 22 - Prob. 22.2QCh. 22 - Prob. 22.3QCh. 22 - Prob. 22.4QCh. 22 - Prob. 22.5QCh. 22 - How do firms reclassify gains and losses on the...Ch. 22 - Prob. 22.7QCh. 22 - Prob. 22.8QCh. 22 - Prob. 22.9QCh. 22 - Prob. 22.10Q
Ch. 22 - Prob. 22.11QCh. 22 - What approach is used in preparing the operating...Ch. 22 - Under the indirect method, do firms subtract bond...Ch. 22 - Do firms subtract pension expense from net income...Ch. 22 - Prob. 22.15QCh. 22 - Prob. 22.16QCh. 22 - Prob. 22.1MCCh. 22 - Prob. 22.2MCCh. 22 - Big Dollars Corporation's comparative financial...Ch. 22 - Prob. 22.4MCCh. 22 - Prob. 22.5MCCh. 22 - Sykes Corporation's comparative balance sheets at...Ch. 22 - Prob. 22.7MCCh. 22 - Prob. 22.8MCCh. 22 - Prob. 22.1BECh. 22 - Prob. 22.2BECh. 22 - Prob. 22.3BECh. 22 - Prob. 22.4BECh. 22 - Prob. 22.5BECh. 22 - Prob. 22.6BECh. 22 - Prob. 22.7BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.9BECh. 22 - Prob. 22.10BECh. 22 - Prob. 22.11BECh. 22 - Prob. 22.12BECh. 22 - Prob. 22.13BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.15BECh. 22 - Prob. 22.16BECh. 22 - Prob. 22.17BECh. 22 - Prob. 22.18BECh. 22 - Prob. 22.19BECh. 22 - Prob. 22.20BECh. 22 - Prob. 22.21BECh. 22 - Prob. 22.22BECh. 22 - Complex Transactions, Acquisitions and...Ch. 22 - Prob. 22.24BECh. 22 - Prob. 22.25BECh. 22 - Complex Transactions, Change in Accounts...Ch. 22 - Prob. 22.27BECh. 22 - Prob. 22.28BECh. 22 - Prob. 22.1ECh. 22 - Prob. 22.2ECh. 22 - Prob. 22.3ECh. 22 - Prob. 22.4ECh. 22 - Prob. 22.5ECh. 22 - Prob. 22.6ECh. 22 - Prob. 22.7ECh. 22 - Prob. 22.8ECh. 22 - Prob. 22.9ECh. 22 - Prob. 22.10ECh. 22 - Statement of Cash Flows, Indirect Method....Ch. 22 - Prob. 22.12ECh. 22 - Prob. 22.13ECh. 22 - Prob. 22.14ECh. 22 - Prob. 22.15ECh. 22 - Prob. 22.16ECh. 22 - Prepare Statement of Cash Flows, Direct Method....Ch. 22 - Prob. 22.2PCh. 22 - Prob. 22.3PCh. 22 - Prob. 22.4PCh. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Prob. 22.11PCh. 22 - Prob. 22.12PCh. 22 - Prob. 22.13PCh. 22 - Statement of Cash Flows, Direct Method, Complex...Ch. 22 - Prob. 1JCCh. 22 - Prob. 1FSCCh. 22 - Prob. 1SSCCh. 22 - Surfing the Standards Case 2: Cash Flow per Share...Ch. 22 - Basis for Conclusions Cases Basis for Conclusions...Ch. 22 - Basis for Conclusions Case 2: Indirect versus...
Additional Business Textbook Solutions
Find more solutions based on key concepts
Bank loan; accrued interest LO132 On October 1, Eder Fabrication borrowed 60 million and issued a nine-month, ...
INTERMEDIATE ACCOUNTING
Place the letter of the appropriate accounting cost in Column 2 in the blank next to each decision category in ...
Fundamentals of Cost Accounting
18. What is the calculation for return on assets (ROA)? Explain what ROA measures.
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
(a) Standard costs are the expected total cost of completing a job. Is this correct? Explain, (b) A standard im...
Managerial Accounting: Tools for Business Decision Making
Disposal of assets. Answer the following questions. 1. A company has an inventory of 1,300 assorted parts for a...
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A. CALCULATE the amount, if any, of recapture of depreciation, ordinary loss or capital gain on the disposal of an asset that was sold at the end of year 1 for $ 18,000. The machine was originally purchased at a cost of $ 20,000 and was depreciated using the MACRS method for a 5 year property class. B. INDICATE if there was recapture of depreciation (D), ordinary loss (P) or capital gain (G) in the disposal of this asset. [fill these blanks] * Amount = $. ___- * Type of disposition:arrow_forwardSale of Equipment Calculate the gain or loss for the following transactions: (1) Geysler Company sold some old equipment that initially cost $30,000 and had $25,000 of accumulated depreciation and received cash in the amount of $3,000.(2) Assume the same facts except Geysler received $9,000. (1) (2) Gain (loss) on sale of equipmentarrow_forwardSelect financial information for Logistical Corp. as at December 31, 20X6, follows: Please find the attached image Additional information is as follows: • During the year, Logistical sold equipment for proceeds of $50,000. The equipment had a cost of $80,000 and accumulated depreciation of $35,000.• During the year, a review of Logistical’s goodwill was completed, and it was determined that the asset was impaired and should be written down by $3,000.• Logistical did not purchase any additional investments in the year. Any changes in the fair value of investments have been adjusted through other comprehensive income. These securities are not cash equivalents.• During the year, a new lease was signed for equipment that had a fair market value of $45,000. Depreciation expense for the year totalled $1,000. The new lease was signed in the year, which required a $7,000 payment at the start of the lease.• Logistical elects to classify any interest paid and dividends paid as financing…arrow_forward
- Assume a company’s beginning and ending balances in the Accumulated Depreciation account are $30,000 and $44,000, respectively. During the period the company sold one noncurrent asset that had an original cost of $8,000. The cash proceeds from the sale were $3,000 and the gain on the sale was $1,000. What is the amount of the depreciation charges that the company would include in the operating activities section of its statement of cash flows? Multiple Choice $18,000 $20,000 $24,000 $8,000arrow_forwardUse this information to answer the following 6 questions. Madison Company acquired a depreciable asset at the beginning of Year 1 at a cost of $12 million. At December 31, Year 1, Madison gathered the following information related to this asset: Carrying value of the asset at 12/31/Y1 $10 million Fair value of the asset at 12/31/Y1 $7.5 million Sum of expected future cash flows at 12/31/Y1 $10 million Present value of expected future cash flows at 12/31/Y1 $8 million Remaining useful life at 12/31/Y1 5 years Determine the impact on Year 1 net income from depreciation and possible impairment under IFRS.arrow_forward5. During the current year an entity sold a piece of equipment used in production. The equipment had been accounted for using the revaluation method and details of the accounts and sale are presented below: Sales price P100,000 Equipment carrying amount (net) 90,000 Revaluation surplus 20,000 Which of the following is correct regarding recording the sale? Group of answer choices The gain that should be recorded in other comprehensive income is P10,000 The gain that should be recorded in profit and loss is P10,000; the P20,000 revaluation surplus may be transferred to retained earnings. The gain that should be recorded in other comprehensive income is P30,000 The gain that should be recorded in profit and loss is P30,000arrow_forward
- Assume Sambazon.com e sold an acai processing machine for $172,000 cash. If accumulated depreciation on the sale date was $58,311 and a gain of $6,721 was recognized on the sale, what was the original cost of the asset? O $223,590 O $216,869 O $165,279 O $65,032 O $113,689arrow_forward> Equipment was acquired at the beginning of the year at a cost of $77,880. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,500. a. What was the depreciation expense for the first year? b. Assuming the equipment was sold at the end of the second year for $58,800, determine the gain or loss on the sale of the equipment. c. Journalize the entry for the sale. If an amount box does not require an entry, leave it blank. ?arrow_forward33.-Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $13,409, and the accumulated depreciation on these fixtures is $7,395 at the time of sale. The fixtures are sold for $3,700. The value of this transaction in the investing section of the statement of cash flows is a.$6,014 b.$2,314 c.$13,409 d.$3,700arrow_forward
- Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $12,549, and the accumulated depreciation on these fixtures is $6,230 at the time of sale. The fixtures are sold for $3,207. The value of this transaction in the investing section of the statement of cash flows is a.$12,549 b.$6,230 c.$3,207 d.$15,572arrow_forwardEstimate the average total estimated useful life of depreciable property, plant, and equipment. Starbucks reports 580.6 million of depreciation and amortization in the statement of cash flows, of which 4.5 million relates to amortization of limited-life intangible assets. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment? Explain.arrow_forwardExpenditures After Acquisition Listed below are several transactions: a. Paid $80 cash to replace a minor part of an air conditioning system. b. Paid $40,000 to fix structural damage to a building. c. Paid $8,000 for monthly salaries. d. Paid $12,000 to replace a manual cutting machine with a computer-controlled machine. e. Paid $1,000 related to the annual painting of a building. Required: Classify each transaction as either a revenue expenditure, a capital expenditure, or neither.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
What is liquidity?; Author: The Finance Storyteller;https://www.youtube.com/watch?v=XtjS7CfUSsA;License: Standard Youtube License