Question
The following three accounts appear in the general ledger of Sarasota Corp. during 2022. Equipment Date Debit Credit Balance Jan. 1 Balance 96,000 July 31
The following three accounts appear in the general ledger of Sarasota Corp. during 2022.
Equipment | ||||||||
---|---|---|---|---|---|---|---|---|
Date | Debit | Credit | Balance | |||||
Jan. 1 | Balance | 96,000 | ||||||
July 31 | Purchase of equipment | 42,000 | 138,000 | |||||
Sept. 2 | Cost of equipment constructed | 31,800 | 169,800 | |||||
Nov. 10 | Cost of equipment sold | 29,400 | 140,400 | |||||
Accumulated DepreciationEquipment | ||||||||
Date | Debit | Credit | Balance | |||||
Jan. 1 | Balance | 42,600 | ||||||
Nov. 10 | Accumulated depreciation on equipment sold | 9,600 | 33,000 | |||||
Dec. 31 | Depreciation for year | 16,800 | 49,800 | |||||
Retained Earnings | ||||||||
Date | Debit | Credit | Balance | |||||
Jan. 1 | Balance | 63,000 | ||||||
Aug. 23 | Dividends (cash) | 8,400 | 54,600 | |||||
Dec. 31 | Net income | 43,200 | 97,800 |
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of plant assets was $4,800. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $31,800.)
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