Acc557 Financial Accounting: E13-6 The three accounts shown below appear in the

Acc557 Financial Accounting

EXERCISE 13-6
The three accounts shown below appear in the general ledger of Chaudry Corp. during 2014.
Equipment
Date Debit Credit Balance
Jan. 1 Balance 160,000
31-Jul Purchase of equipment 70,000 230,000
Sept. 2 Cost of equipment constructed 53,000 283,000
Nov. 10 Cost of equipment sold 49,000 234,000

Accumulated Depreciation—Equipment
Date Debit Credit Balance
Jan. 1 Balance 71,000
Nov. 10 Accumulated depreciation on equipment sold 28,000 43,000
Dec. 31 Depreciation for year 23,000 66,000

Retained Earnings
Date Debit Credit Balance
Jan. 1 Balance 105,000
Aug. 23 Dividends (cash) 17,000 88,000
Dec. 31 Net income 67,000 155,000

From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of plant assets was $5,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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