Question - What amount of the gain from the sale of equipment will be reported in the investing activities section of the Statement of Cash Flows for fiscal year 2016?
The following are selected accounts from the comparative balance sheets and other data for Good, Bad & Ugly, Inc. All balances are normal.
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December 31
|
|
Accounts
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2016
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2015
|
|
Cash
|
$76,105
|
$51,000
|
|
Land
|
180,000
|
142,500
|
|
Equipment
|
270,000
|
300,000
|
|
Accumulated Depreciation, Equipment
|
(75,000)
|
(67,500)
|
|
Long Term Notes Payable
|
170,000
|
150,000
|
|
Common Stock, $5 par
|
185,000
|
165,000
|
|
Paid in Capital in Excess of Par
|
32,500
|
0
|
|
Retained Earnings
|
91,450
|
87,500
|
Equipment costing $50,000 with accumulated depreciation of $30,000 was sold for $23,500 in cash.
Additional equipment was purchased by signing a new long-term note payable.
Net income for 2016 was $35,000.
Depreciation expense for the year was $37,500.