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Discuss a statement of cash flows using the indirect method

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How do you calculate the sale of equipment for the following problem?

The three accounts shown below appear in the general ledger of Herrick Corp. during 2015.

Equipment
Date Debit Credit Balance
Jan. 1 Balance 159,170
July 31 Purchase of equipment 69,120 228,290
Sept. 2 Cost of equipment constructed 54,430 282,720
Nov. 10 Cost of equipment sold 52,000 230,720
 
Accumulated Depreciation-Equipment
Date Debit Credit Balance
Jan. 1 Balance 71,050
Nov. 10 Accumulated depreciation on equipment sold 28,450 42,600
Dec. 31 Depreciation for year 27,680 70,280
 
Retained Earnings
Date Debit Credit Balance
Jan. 1 Balance 105,150
Aug. 23 Dividends (cash) 12,510 92,640
Dec. 31 Net income 76,770

169,410

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 equipment was $4,460. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $54,430.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) 

Reference no: EM131784905

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