Asked by george brown on May 12, 2024
Verified
On its January 1, 2010, balance sheet, Dilbert Company reported equipment of $50, 000 and accumulated depreciation of $20, 000.During 2010, Dilbert sold equipment with an original cost of $5, 000.Selected information from Dilbert's 2010 statement of cash flows follows:
Net income $20,000 Depreciation expense on equipment 2,000 Gain on sale of equipment 600 Proceeds from sale of equipment 1,500 Purchase of equipment 8,000\begin{array}{ll}\text { Net income } & \$ 20,000 \\\text { Depreciation expense on equipment } & 2,000\\\text { Gain on sale of equipment } & 600 \\\text { Proceeds from sale of equipment } & 1,500 \\\text { Purchase of equipment } & 8,000\end{array} Net income Depreciation expense on equipment Gain on sale of equipment Proceeds from sale of equipment Purchase of equipment $20,0002,0006001,5008,000 Required:
Compute the amount of equipment and accumulated depreciation that should appear on Dilbert's December 31, 2010, balance sheet.
Accumulated Depreciation
The total amount of a tangible asset's cost that has been expensed over time through depreciation.
Original Cost
The initial monetary value of an asset or investment, reflecting the purchase price or production cost before adjustments like depreciation or amortization.
Gain on Sale
Profit realized from the sale of assets or investments when the selling price exceeds the book value.
- Assess and elucidate the ramifications of specific transactions on the statement of cash flows.
- Understand the treatment and reporting of non-cash investing and financing activities.
Verified Answer
KA
Keren AlvarezMay 19, 2024
Final Answer :
Equipment: $53, 000 ($50, 000 + $8, 000 - $5, 000) Accumulated depreciation: $17, 900 ($20, 000 + $2, 000 - $4, 100*) *Book value of equipment sold: $900($1,500−600) \$ 900(\$ 1,500-600) $900($1,500−600)
A ccumulated depreciation on equipment sold: $4,100($5,000 \$ 4,100(\$ 5,000 $4,100($5,000 - $900) \$ 900 )$900)
A ccumulated depreciation on equipment sold: $4,100($5,000 \$ 4,100(\$ 5,000 $4,100($5,000 - $900) \$ 900 )$900)
Learning Objectives
- Assess and elucidate the ramifications of specific transactions on the statement of cash flows.
- Understand the treatment and reporting of non-cash investing and financing activities.