The Activity in the Plant Assets and Related Accumulated Depreciation

question 134

Essay

The activity in the Plant Assets and related Accumulated Depreciation accounts for 2009 is shown below. In addition, the income statement shows a gain on sale of plant assets of $16,000.
Plant Assets Accumulated Depreciation
Beginning balance, 2009 $234,000 Beginning balance, 2009 $124,000
Purchases 120,000 2009 Depreciation 36,000
Disposals (82,000) Disposals (26,000)
Ending balance, 2009 $272,000 Ending balance, 2009 $134,000
Based on the information given, compute the amounts to be shown and indicate how they would appear on the statement of cash flows. Assume that the indirect method is being used and that the plant assets were purchased for cash.

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Definitions:

Payroll Tax

Taxes levied on employers or employees, and are based on the salary or wages of employees. These taxes fund social security and healthcare programs.

Elastic

describes a condition in which the quantity demanded or supplied of a good or service is highly responsive to changes in its price.

Corporate Profits Tax

A levy imposed on the income or profit earned by corporations or analogous legal entities.

Partnerships

A legal form of business operation between two or more individuals who share management and profits.