DETERMINING CASH FLOWS FROM INVESTING ACTIVITIES Airco owns several aircraft and its balance sheet indicated the following amounts for its aircraft accounts at the end of 2009 and 2008:

12/31/2009 12/31/2008 Equipment, aircraft $28,500,000 $21,750,000 Accumulated depreciation 11,900,000 10,100,000 Book value $16,600,000 $11,650,000 Required:

. Assume that Airco did not sell any aircraft during 2009. Determine the amount of depreciation expense for 2009 and the cash spent for aircraft purchases in 2009.

. If Airco sold for cash aircraft that cost $4,100,000 with accumulated depreciation of

$3,500,000, producing a gain of $300,000, determine

(a) the amount of depreciation expense,

(b) the cash paid for aircraft purchases in 2009 and

(c) the cash inflow from the sale of aircraft.

Exercise