1 An asset with a cost of $35,000 and accumulated depreciation of $25,000 is sold on June 30th for 2 $10,500. Annual straight-line depreciation is $5000 4 Required: 5 a. What is the book value of the asset at the time of sale? (You need to record depreciation for Jan-June) Book value 10 b. What is the amount of gain or loss on the disposal? Gain on sale 12 13 14 c. How would the sale affect net income (increase, decrease, no effect) and by how much? 15 16 17 Net income would 19 d. How would the sale affect the amount of total assets shown on the balance sheet (increase, decrease, 20 no effect) and by how much? (Do not Total assets would 23 24 e. How would the event affect the statement of cash flows (inflow, outflow, no effect) and in what section? 26 Effect 28 29 30