The following events apply to R&L Logging Company for the 2010 fiscal year. 1. The company started
Question:
The following events apply to R&L Logging Company for the 2010 fiscal year.
1. The company started when it acquired $80,000 cash from the issue of common stock.
2. Purchased a new skidder that cost $75,000 cash.
3. Earned $98,000 in cash revenue.
4. Paid $52,000 cash for salaries expense.
5. Paid $12,000 cash for operating expenses.
6. Adjusted the records to reflect the use of the skidder. The skidder, purchased on January 1, 2010, has an expected useful life of five years and an estimated salvage value of $5,000. Use straight-line depreciation. The adjusting entry was made as of December 31, 2010.
Required
a. Record the above transactions in a horizontal statements model like the following one.
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b. What amount of depreciation expense would R&L Logging Co. report on the 2011 income statement?
c. What amount of accumulated depreciation would R&L Logging Co. report on the December 31, 2011, balance sheet?
d. Would the cash flow from operating activities be affected by depreciation in2011?
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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a Balance Sheet Income Statement Statemt of Assets Equity Rev Exp Net Inc Cash Flows ...View the full answer
