Airco owns several aircraft and its balance sheet indicated the following amounts for its aircraft accounts at

Question:

Airco owns several aircraft and its indicated the following amounts for its aircraft accounts at the end of 2011 and 2010:

Airco owns several aircraft and its balance sheet indicated the

Required:
1. Assume that Airco did not sell any aircraft during 2011. Determine the amount of depreciation expense for 2011 and the cash spent for aircraft purchases in 2011.
2. If Airco sold for cash aircraft that cost $4,100,000 with accumulated depreciation of $3,825,000, producing a gain of $193,000, determine
(a) The amount of depreciation expense,
(b) The cash paid for aircraft purchases in 2011,
(c) The cash inflow from the disposal of aircraft.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...