The Opening Balance in the Computer Account for Adara Corp

question 10

Essay

The opening balance in the computer account for Adara Corp for fiscal 2020 was $100,000; the closing balance was $107,000. The corresponding balances in the accumulated depreciation accounts were $63,000 and $67,500. During the year Adara scrapped a computer originally costing $13,000 having a remaining net book value of $3,500 and purchased a replacement machine for cash.
Required:
a. Prepare the underlying journal entries to record the foregoing transactions and record events stemming from the transactions.
b. For each entry identify the cash flow effects, if any, under both the direct and indirect methods of presentation and classify the cash flow according to its nature.

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Definitions:

Focused Differentiation Strategy

A business strategy where a company targets a specific market segment, offering unique features that meet the needs of that segment.

Competitive Advantage

A condition that enables a company or country to produce goods or services at a lower price or in a more desirable fashion for customers than its competitors.

Unique Product

A product that stands out from others due to its distinctive characteristics, features, or innovation.

Competitive Advantage

The unique positioning and strategy that enable a business to generate greater sales or margins than its competition.