Part 1

Lockspot Inc. purchased a machine for $100,000 on January 1, 2008. The estimated useful life was 10 years and the salvage value was zero. On January 1, 2016, Lockspot sells the machine, reporting a gain of $2,000.

1. What is the annual depreciation expense for the machine?
2. What is the book value of the machine on the date of sale?
3. What is the cash flow associated with the sale? (Note: inflows are positive and outflows are negative)

Part 2

1. VanDerMeer Co. issues a bond with principal (face value) of $50,000. The bond was issued at a discount, and the company debits the bond discount account by $2,000 at issuance date. What is the cash flow associated with the issuance? (Note: inflows are positive and outflows are negative).

Part 3

1. Exigent, Inc. repurchases 10,000 shares of common stock at $15 per share. What is the cash flow associated with the repurchase? (Note: inflows are positive and outflows are negative).

Part 4

1. The Burratta Co. purchases a warehouse building with a total acquisition cost of $500,000. The company pays $100,000 cash, and signs a note to pay the remaining $400,000 over the next five years. What is the cash flow associated with this purchase? (Note: inflows are positive and outflows are negative).