On January 1 2016 Bacco Company had a balance of
On January 1, 2016, Bacco Company had a balance of $72,350 in its Delivery Equipment account. During 2016, Bacco purchased delivery equipment that cost $22,100. The balance in the Delivery Equipment account on December 31, 2016, was $69,400. The 2016 income statement reported a gain from the sale of equipment for $5,000. On the date of sale, accumulated depreciation on the equipment sold amounted to $22,000.
Required
a. Determine the original cost of the equipment that was sold during 2016.
b. Determine the amount of cash flow from the sale of delivery equipment that should be shown in the investing activities section of the 2016 statement of cash flows.
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