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Anybody good at accounting?

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Re: Anybody good at accounting?

Postby Dan Lambskin » Tue Feb 17, 2009 1:55 pm

all i remember from my accounting for engineers class is that you cant depreciate land...that and how a few of us got caught handing in duplicate homework and these two morons tried to say they didnt cheat. the one guy copied it verbatim, including a little thought balloon type thingy where he made a note off to one side in the exact same place as his buddy.
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Re: Anybody good at accounting?

Postby laxguy8947 » Wed Feb 18, 2009 1:36 am

JTWood wrote:
cordscords wrote:Stuck on a HW problem. Anybody who can help I appreciate it. Here it is:

The T accounts for Equipment and the related Accumulated Depreciation for Pettengill Company at the end of 2008 are shown here.

Equipment :
Beginning balance- 81,600
Acquisitions- 42,500
Disposals- 23,700
Ending balance- 100,400

Accumulated Depreciation:
Disposals- 5,800
Beginning balance- 44,900
Depreciation expense- 13,100
Ending balance- 52,200

In addition, Pettengill Company’s income statement reported a loss on the sale of equipment of $5,700. What amount was reported on the statement of cash flows as “cash flow from sale of equipment”?

I have an accounting degree, but I've been out of school for a few years. These things are never set up like real-world scenarios, so let me see if I can jog the ol' memory. We're trying to figure out how much they sold the equipment for, since their raw receipt will be the number that slides into the cash flow statement.

I think this is pretty simple, God help me:

They bought the equipment for $23700 and accumulated $5800 in depr, which would give the asset a book value of $17900. If they lost $5700 on the sale, then they must have sold it for $5700 less than book value: $17900 - $5700 = $12200. So the cash flow entry would be $12200:

Cash $12200
Accu Depr $5800
Loss $5700

Equipment $23700

Thirded. I actually enjoy accounting. Don't ask why.
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