The following selected account balances relate to the plant asset accounts of of changes in plant asset Zambia Inc. at year-end.

accounts.

(SO 4)

2007 2006 Accumulated depreciation—buildings $337,500 $300,000 Accumulated depreciation—equipment 144,000 96,000 Buildings 750,000 750,000 Depreciation expense 101,500 85,500 Equipment 300,000 240,000 Land 100,000 70,000 Loss on sale of equipment 3,000 0 Additional information: 1. Zambia purchased $85,000 of equipment and $30,000 of land for cash in 2007. 2. Zambia also sold equipment in 2007. 3. Depreciation expense in 2007 was $37,500 on building and $64,000 on equipment.

Instructions

(a) Cash proceeds $6,000

(a) Determine the amounts of any cash inflows or outflows related to the plant asset accounts in 2007.

(b) Indicate where each of the cash inflows or outflows identified in

(a) would be classified on the statement of cash flows.

Prepare the operating