Warren Corporation's balance sheet reports equipment that originally cost $65,000.The accumulated depreciation for the equipment is $25,000.Warren sells the equipment for $37,000.What would the effect be on its income statement and statement of cash flows?

Question

Quizplus · Accepted Answer

Loss = Proceeds of $37,000 - Book value of ($65,000 - $25,000)= $3,000
Cash flows reported as investing activities include cash receipts (the inflow of $37,000)from selling equipment.

Warren Corporation's Balance Sheet Reports Equipment That Originally Cost $65,000