The machine has an expected useful life of five years and

Reference no: EM13481706

Leslie Company sells business stationery imprinted with acustomer's business name and address. To do this, it purchased a printing machine costing$48,000 on January 1, 2004. The machine has an expected useful life of five years and anestimated salvage value of $3,000. Leslie Company uses straight-line depreciation for all of its depreciable assets.

On August 1, 2007, the manager of the print shop was persuadedto purchase a new machine that operated more efficiently. The old machine was sold at thattime for $5,000.

a. Calculate the depreciation expense recorded on the oldmachine for each year of use.

b. Calculate any gain or loss on disposal of the oldmachine.

c. Show how information about the printing machine transactionswould be reported on the statement of cash flows for years 2004 through 2007. Assume theindirect format is used.

d. How would the information about the printing machine affectthe income statement for years 2004 through 2007?

Reference no: EM13481706

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