The Opening Balance in the Computer Account for Adara Corp

question 40

Essay

The opening balance in the computer account for Adara Corp for fiscal 2017 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:

Salaried Employees

Workers who are paid a fixed regular amount by their employer, typically on a monthly or biweekly basis, regardless of hours worked.

Hourly Work

Work paid on an hourly basis.

Real Wages

The purchasing power of an individual's earnings, accounting for inflation.

Cost-Of-Living Increases

Adjustments to salaries or wages to offset the impact of inflation on purchasing power.