The following selected account balances relate to the property, plant, and equipment accounts of Katewill Inc.:

Additional information:
1. Purchased $40,000 of land for cash.
2. Purchased $75,000 of equipment for a $10,000 down payment, financing the remainder with a bank loan. Equipment was also sold during the year.
Instructions
(a) Calculate any cash receipts or payments related to the property, plant, and equipment accounts in 2018.
(b) Indicate where each of the cash receipts or payments identified in part (a) would be classified on the statement of cash flows or accompanying notes.
(c) Would you expect a growing company like Katewill to be generating or using cash for its investing activities? Explain.

Transcribed Image Text:

2018 2017 Accumulated depreciation-buildings $337,500 $300,000 Accumulated depreciation-equipment 144,000 96,000 Depreciation expense-buildings Depreciation expense-equipment Land Buildings Equipment Gain on disposal (equipment) 37,500 37,500 60,00048,000 100,000 60,000 50,000 750,000 30, 240,00o 5,000