Equipment with a Cost of $80,000 and Accumulated Depreciation of $75,000

question 162

Essay

Equipment with a cost of $80,000 and accumulated depreciation of $75,000 is sold for $12,000 cash.
Required:
Part a.Prepare the journal entry to record this transaction.
Part b.Explain how this transaction would be reported on the statement of cash flows prepared using the indirect method.

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Definitions:

Supplies On Account

Goods or items purchased on credit, where payment is deferred to a future date, typically recorded as a liability until paid.

Debit And Credit

Debit and credit are fundamental categories used in accounting to record and maintain financial transactions, where debit refers to the left side of an account and credit refers to the right side.

Insurance Advance

A payment made in advance by an insurance company, typically for claims or benefits before the final settlement.

Secretary's Salary

The compensation paid to an administrative professional for performing secretarial and administrative duties.