Question

Lucy Co. sold equipment that cost $119,000 and had a book value of $81,000 for $87,000. Data from Lucy's comparative balance sheets are: 12/31/20 12/31/19 Machinery $850,000 $720,000 Accumulated depreciation 240,000 186,000 Required: Indicate what will be reported on the Statement of Cash Flow for the year ending December 31, 2020. Include (1) the transaction description, (2) the dollar amount and (3) whether that amount will be added or subtracted.

Answer 1

Answer:

Kindly Go through explanation.

Explanation:

Added subtracted

Operating Activities (Indirect Method)  

Depreciation Expense $92,000

Gain on sale of equipment  $6,000

Investing Activities  

Sale of equipment $87,000

Purchase of equipment  $249,000

Working  

Depreciation Expense  

[(119,000 - 81,000) + (240,000 - 186,000)]  

Machinery, 12/31/19 $720,000

Less: Sale -$119,000

$601,000

Machinery, 12/31/20 $850,000

Purchase of equipment $249,000.

Please go through the attached file to understand this table better and see the answer you sort.