During the period, English Company sold some excess equipment at a loss. The following information was collected
Question:
From the income statement
Depreciation expense ....... $ 630
Loss on sale of equipment ...... 2,700
From the balance sheet
Beginning equipment ........ 13,000
Ending equipment ......... 7,700
Beginning accumulated depreciation . 1,800
Ending accumulated depreciation ... 1,900
No new equipment was bought during the period.
Required:
1. For the equipment that was sold, determine its original cost, its accumulated depreciation, and the cash received from the sale.
2. English Company uses the indirect method for the Operating Activities section of the cash flow statement. What amount related to the sales would be added or subtracted in the computation of Net Cash Flows from Operating Activities?
3. What amount related to the sales would be added or subtracted in the computation of Net Cash Flows from Investing Activities?
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