Question
Centralia Stores Inc. had property, plant, and equipment, net of accumulated depreciation, of $4,459,000 and intangible assets, net of accumulated amortization, of $673,000 at December
Centralia Stores Inc. had property, plant, and equipment, net of accumulated depreciation, of $4,459,000 and intangible assets, net of accumulated amortization, of $673,000 at December 31, 2012. The company's 2012 statement of cash flows, prepared using the indirect method, included the following items:
a. The Cash Flows from Operating Activities section included three additions to net income:
(1) Depreciation expense of $672,000 (2) Amortization expense of $33,000 (3) Loss on the sale of equipment of $35,000
b. The Cash Flows from Operating Activities section also included a subtraction from net income for the gain on the sale of a copyright of $55,000.
c. The Cash Flows from Investing Activities section included outflows for the purchase of a building of $292,000 and $15,000 for the payment of legal fees to protect a patent from infringement.
d. The Cash Flows from Investing Activities section also included inflows from the sale of equipment of $315,000 and the sale of a copyright of $75,000.
Required:
1. Determine the book values of the assets that were sold during 2012.
Asset | Book Value at Time of Sale |
Equipment | $ |
Copyright | $ |
2. Reconstruct the amount of property, plant, and equipment, net of accumulated depreciation, that was reported on the company's balance sheet at December 31, 2011.
Net book value at 12/31/11 | $ |
Plus purchases during 2012 | |
Less book value of equipment sold during 2012 | |
Less 2012 depreciation | |
Net book value at 12/31/12 | $ |
3. Reconstruct the amount of intangibles, net of accumulated amortization, that was reported on the company's balance sheet at December 31, 2011.
Net book value at 12/31/11 | $ |
Plus payment of legal fees during 2012 | |
Less book value of copyright sold during 2012 | |
Less 2012 amortization | |
Net book value at 12/31/12 | $ |
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