The following three accounts appear in the general ledger of Herrick Corp. during 2020. Equipment Date Debit
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Question:
The following three accounts appear in the general ledger of Herrick Corp. during 2020.
Equipment | ||||||||
Date | Debit | Credit | Balance | |||||
Jan. 1 | Balance | 161,200 | ||||||
July 31 | Purchase of equipment | 68,100 | 229,300 | |||||
Sept. 2 | Cost of equipment constructed | 54,600 | 283,900 | |||||
Nov. 10 | Cost of equipment sold | 49,100 | 234,800 | |||||
Accumulated Depreciation—Equipment | ||||||||
Date | Debit | Credit | Balance | |||||
Jan. 1 | Balance | 70,700 | ||||||
Nov. 10 | Accumulated depreciation on equipment sold | 31,200 | 39,500 | |||||
Dec. 31 | Depreciation for year | 24,200 | 63,700 | |||||
Retained Earnings | ||||||||
Date | Debit | Credit | Balance | |||||
Jan. 1 | Balance | 104,200 | ||||||
Aug. 23 | Dividends (cash) | 15,800 | 88,400 | |||||
Dec. 31 | Net income | 66,700 | 155,100 |
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of plant assets was $5,960. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $51,390.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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