Friel Company sold office equipment with a cost of $21,000 and accumulated depreciation of $9,000 for $14,000.

Question:

Friel Company sold office equipment with a cost of $21,000 and accumulated depreciation of $9,000 for $14,000.

Required
a. What is the book value of the asset at the time of sale?
b. What is the amount of gain or loss on the disposal?
c. How would the sale affect net income (increase, decrease, no effect) and by how much?
d. How would the sale affect the amount of total assets shown on the (increase, decrease, no effect) and by how much?
e. How would the event affect the statement of cash flows (inflow, outflow, no effect) and in what section?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...