Calculations for Statement of Cash Flows (Indirect Method)

question 46

Essay

Calculations for statement of cash flows (indirect method)
During 2020, equipment was sold for $ 15,000. This equipment originally cost $ 24,000 and had a book value of $ 14,000 at the date of sale. Accumulated depreciation for equipment was $ 65,000 at December 31, 2019 and $ 62,000 at December 31, 2020.
Instructions
Based on the above information show how the sale (including any gain or loss), and the depreciation expense for 2020 would be shown on a statement of cash flows (indirect method). Include your calculations.

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Definitions:

Incremental Analysis

The process of identifying the financial data that change under alternative courses of action.

Variable Costs

Costs that vary in total directly and proportionately with changes in the activity level.

Fixed Costs

Costs that remain the same in total regardless of changes in the activity level.

External Price

External price refers to the price of a product or service determined by market conditions outside of a company or organization, influencing or reflecting its value in the broader market.