The financial statements of Milk River Ltd. follow: Additional information: 1. Equipment costing $24,000 was purchased with

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The financial statements of Milk River Ltd. follow:
The financial statements of Milk River Ltd. follow:
Additional information:
1. Equipment
The financial statements of Milk River Ltd. follow:
Additional information:
1. Equipment

Additional information:
1. Equipment costing $24,000 was purchased with an $8,000 down payment and the remainder was financed with a note payable.
2. During the year, equipment was sold for $10,500 cash. This equipment had cost $12,000 originally and had a carrying amount of $8,500 at the time of sale.
3. All depreciation expenses are in the operating expenses category.
4. Notes payable were also repaid during the year.
Instructions
Prepare a cash flow statement for the year using the indirect method.
TAKING IT FURTHER
If equipment was both purchased and sold during the year, is it important to show both of these transactions? Or is it sufficient to show only the net increase or decrease in equipment, similar to how increases and decreases in inventory are shown?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Related Book For  book-img-for-question

Accounting Principles Part 3

ISBN: 978-1118306802

6th Canadian edition Volume 1

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow

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