Impact of Operating and Investing Activities: Indirect Method

The following account balances were taken from the records of Roadhouse Corp. for the past two years:

	December 31
	2012	2011
Plant and equipment	$750,000	$500,000
Accumulated depreciation	160,000	200,000
Patents	92,000	80,000
Retained Earnings	825,000	675,000

Other information available for 2012:

1. Net income for the year was $200,000
2. Depreciation expense on plant and equipment $50,000
3. Plant and equipment with an original cost of $150,000 was sold for $64,000 (you will need to determine the book value of the assets sold)
4. Amortization expense on patents was $ 8000
5. Both new plant and equipment and patents were purchased during the year.

Fill in the Blanks on these T-Accounts

Accumulated Depreciation

Sale of Plant and equipment ________________

Beginning Balance _______________________ Depreciation Expense ______________________

Ending Balance _______________________

Plant and Equipment

Beginning Balance _______________________ Purchases ______________________________

Sale of Plant and Equipment __________________

Ending Balance __________________________

Patents

Beginning Balance _______________________ Purchase of Patent_______________________

Amortization Expense ______________________

Ending Balance _____________________