Refer to the Simplified Funds Statement for a Period in Exhibit 5.15 or page 174. Ten of the lines in the statement are numbered. Line (2) should be expanded to say "Additions for Expenses and Other Charges Against Income Not Using Funds," and line (3) should be expanded to say "Subtractions for Revenues and other Credits to Income Not Producing Funds from Operations." Ignore the unnumbered lines in responding to the questions below.

Assume that the accounting cycle is complete for the period and that all of the financial statements have been prepared. Then, it is discovered that a transaction has been overlooked. That transaction is recorded in the accounts and all of the financial statements are corrected. Define funds as working capital. For each of the following transactions, indicate which of the numbered lines of the funds statement is affected and by how much. Ignore income tax effects.

a A machine that cost \(\$ 10,000\) and that has \(\$ 7,000\) of accumulated depreciation is sold for \(\$ 4,000\) cash.

b A machine that cost \(\$ 10,000\) and that has \(\$ 7,000\) of accumulated depreciation is sold for \(\$ 2,000\) cash.

c A machine that cost \(\$ 10,000\) and that has \(\$ 7,000\) of accumulated depreciation is traded in on a new machine. The new machine has a cash price of \(\$ 12,000\). A trade-in allowance for the old machine of \(\$ 4,000\) is given, so that \(\$ 8,000\) cash is paid.

d A fire destroys a warehouse. The loss is uninsured. The warehouse cost \(\$ 80,000\) and at the time of the fire had accumulated depreciation of \(\$ 30,000\).

e Refer to the facts of part

d. Inventory costing \(\$ 70,000\) was also destroyed. The loss was uninsured.