Lewis Inc Uses the Indirect Method to Prepare Its Statement of of Cash

question 38

Essay

Lewis Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet:
$\begin{array}{c} \text {Avatar Company}\\ \text {Comparative Balance Sheet}\\ \text {December 31, 2015 and 2014}\\\begin{array}{lll}\\\text {Cash}\\\text {Accounts Receivable}\\\text {Inventory}\\\text {PP\&E, net}\\\text {Total assets}\end{array}\begin{array}{c}\underline{2015} \\\$ 42,000 \\62,000 \\106,000 \\\underline{240,000} \\\underline{\underline{\$ 450,000 }}\\\end{array}\begin{array}{c}\underline{2014} \\\$ 36,000 \\70,000 \\50,000 \\\underline{180,000} \\\underline{\underline{\$ 336,000}} \\\end{array}\begin{array}{c}\underline{\text { Increase/decrease }}\\\$ 6,000 \\(8,000) \\56,000 \\\underline{60,000} \\\underline{\underline{\$ 114,000}} \end{array}\end{array}$

Additional information provided by the company includes the following:
Equipment costing $104,000 was purchased for cash.
Equipment with a net asset value of $20,000 was sold for $28,000.
Depreciation Expense of $24,000 was recorded during the year.
With the help of T-account format, analyze the transactions affecting Property, Plant & Equipment, net.

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Definitions:

Wide Area Networks

Communications networks that extend over large geographical areas, often connecting multiple small networks.

Executive Systems

High-level information systems designed to aid executives in decision-making by providing relevant data and insights.

Credit Card Applications

Forms or online processes submitted by individuals seeking to obtain a credit card from a financial institution.

Local Area Networks

A network of connected devices in a specific geographical location, such as a home or office, that share resources and data.