On December 31, Year 1, the Exeter Corporation had property and equipment of $1,450,000 and accumulated...

Transcribed Image Text:

On December 31, Year 1, the Exeter Corporation had property and equipment of $1,450,000 and accumulated depreciation of $500,000. During Year 2, the company acquired an asset for $250,000 in a transaction properly classified as a capital lease. The new asset was used to replace a similar piece of equipment with a historical cost of $200,000 that had been sold for $20,000, resulting in a gain of $10,000. The net book value of all of Exeter's equipment at December 31, Year 2 was $850,000. What was the amount of depreciation expense used in Exeter's Statement of Cash Flows, prepared using the indirect method, to reconcile net income to cash flows from operations? On December 31, Year 1, the Exeter Corporation had property and equipment of $1,450,000 and accumulated depreciation of $500,000. During Year 2, the company acquired an asset for $250,000 in a transaction properly classified as a capital lease. The new asset was used to replace a similar piece of equipment with a historical cost of $200,000 that had been sold for $20,000, resulting in a gain of $10,000. The net book value of all of Exeter's equipment at December 31, Year 2 was $850,000. What was the amount of depreciation expense used in Exeter's Statement of Cash Flows, prepared using the indirect method, to reconcile net income to cash flows from operations?

Answer rating: 100% (QA)

To determine the amount of depreciation expense used in Exeter Corporations Statement of ... View the full answer