The following information is from Old Blue Corporation's year-end 2009 and 2010 balance sheets:
?
On October 31, 2010, Old Blue sold equipment that originally cost $50,000 and had a current book value of $10,000 for $14,000 cash.
Required:
a. How much depreciation expense did Old Blue recognize in 2010?
b. Assuming that Old Blue prepares its statement of cash flows using the indirect method, how will Old Blue's depreciation expense appear on its statement of cash flows?
c. If Old Blue prepares its statement of cash flows using the indirect method, how will the equipment disposal appear on its statement of cash flows?
d. If Old Blue prepares its statement of cash flows using the direct method, how will the equipment disposal appear on its statement of cash flows?
e. How much equipment did Old Blue buy during 2010?
f. How will Old Blue's equipment purchases appear on its statement of cash flows?

Question

The following information is from Old Blue Corporation's year-end 2009 and 2010 balance sheets:
?  
On October 31, 2010, Old Blue sold equipment that originally cost $50,000 and had a current book value of $10,000 for $14,000 cash.
Required:
a.	How much depreciation expense did Old Blue recognize in 2010?
b.	Assuming that Old Blue prepares its statement of cash flows using the indirect method, how will Old Blue's depreciation expense appear on its statement of cash flows?
c.	If Old Blue prepares its statement of cash flows using the indirect method, how will the equipment disposal appear on its statement of cash flows?
d.	If Old Blue prepares its statement of cash flows using the direct method, how will the equipment disposal appear on its statement of cash flows?
e.	How much equipment did Old Blue buy during 2010?
f.	How will Old Blue's equipment purchases appear on its statement of cash flows?

Quizplus · Accepted Answer

The Answer of The following information is from Old Blue Corporation's year-end 2009 and 2010 balance sheets:
?  
On October 31, 2010, Old Blue sold equipment that originally cost $50,000 and had a current book value of $10,000 for $14,000 cash.
Required:
a.	How much depreciation expense did Old Blue recognize in 2010?
b.	Assuming that Old Blue prepares its statement of cash flows using the indirect method, how will Old Blue's depreciation expense appear on its statement of cash flows?
c.	If Old Blue prepares its statement of cash flows using the indirect method, how will the equipment disposal appear on its statement of cash flows?
d.	If Old Blue prepares its statement of cash flows using the direct method, how will the equipment disposal appear on its statement of cash flows?
e.	How much equipment did Old Blue buy during 2010?
f.	How will Old Blue's equipment purchases appear on its statement of cash flows?

The Following Information Is from Old Blue Corporation's Year-End 2009