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Financial Accounting

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SCF - Sale of Equipment with a Gain

FINACT-YVWFG6

Warner Farms, Inc. sold equipment it had originally purchased for \$78,000 on January 1, 2009, for \$43,200 on December 31, 2014. After the December 31, 2014 adjusting journal entry (AJE) to record depreciation expense to the date of the sale had been made, the Accumulated Depreciation account had a credit balance of \$46,400.

(I): How much gain would be recorded on the sale of the equipment (in $)?

(II): Assuming the indirect method was used, in which section of the statement of cash flows would the gain be reported (Operating, Investing, or Financing)?

(III): In which section of the statement of cash flows would the cash received from the sale of the equipment of \$43,200 be reported (Operating, Investing, or Financing)?