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Homework answers / question archive / Tangiers Company reported a loss of $1,300 for the sale of equipment for cash

Tangiers Company reported a loss of $1,300 for the sale of equipment for cash

Accounting

Tangiers Company reported a loss of $1,300 for the sale of equipment for cash. The equipment had a cost of $32,000 and accumulated depreciation of $29,500. How much will Tangiers report in the cash flows from investing activities section of its statement of cash flows?

a. $1,200

b. $1,300

c. $30,700

d. $3,800

 

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Answer: a .

Book value of equipment = Original Cost- Accumulated Depreciation

                                                          =  $32000-$29500

                                                          =  $ 2500

              Sale proceeds of equipment = Book value -Loss of sale of equipment

                                                          = $2500-$1300

                                                          = $1200

                 Hence, sale proceeds of $1200 are shown in cash flow from investing activities.

 

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