The Boeing Company reported in its 2008 annual report $1,325 million in depreciation expense and $117 million in amortization expense for the year ending December 31, 2008.

a. Describe how the recognition of depreciation and amortization affects the basic accounting equation.

b. As reported in the footnotes Boeing’s accumulated depreciation balance grew during the year from $12,280 million to $12,795 million. The historic cost of property, plant, and equipment was $21,579 and $21,042 in 2008 and 2007, respectively. During 2008 the company purchased property, plant, and equipment for a total of $1,674 million and collected proceeds of $34 million on sales of property, plant, and equipment. Compute the gain or loss on the sale of property, plant, and equipment in 2008. On which financial statement would this appear, and how would these transactions affect the statement of cash flows?