Question

Jounral enrties using for a cash flow statement. a, sold equipment: cost $70,000 Acc. Depreciation $45,000...

Jounral enrties using for a cash flow statement.

a, sold equipment: cost $70,000

Acc. Depreciation $45,000

Sales Price $28,000

b. bought equipment: purchase price $60,000

cash paid $40,000

LT payable for calance $20,000

Homework Answers

Answer #1

Journal

Date Particulars L.F. Dr.($) Cr.($)

Cash/Bank A/c Dr. 28,000

To Equipment 25,000

To Income statement 3,000

(Equipment costing $70,000, accumulated depreciation $45,000, was sold for $28,000 at a gain of $3,000)

Euipment A/c Dr. 60,000

To Cash A/c 40,000

To LT payable A/c 20,000

( Equipments costing $60,000 bought paying $40,000 in cash by balance $20,000 by LT payable)

Equipment purchased and payment made $40,000 will be deducted under investing activities and equipment sold for $28,000 will be added under investing activities while preparing cash flow statement.

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