The following are the relevant information about BOMM Company PPE and bonds payable at year end: 2015 2016 Land USD 7,100,000 46,000,000 USD 8,200,000 69,000,000 Buildings Less: Accumulated Depreciation - Buildings (8,200,000) (13,470,000) Equipment 63,000,000 49,000,000 Less: Accumulated Depreciation - Equipment (13,000,000) (9,700,000) Bonds payable 11,500,000 During the year, a piece of land was purchased for cash. During the year, two buildings were also purchased. One was obtained by issuing par-value bonds, while the other was obtained in cash. Finally, a piece of equipment was sold for cash, resulting in a profit of USD 1,500,000. In 2016, the total depreciation expense recorded was USD 11,250,000. Given all of the information, a) how much cash did BOMM Company receive from the sale of equipment in 2016? and b) in the investing section of BOMM Company's 2016 statement of cashflow, how much net cash flow should be included? Show and explain the solution.

The following are the relevant information about BOMM Company PPE and bonds payable at year end: 2015 2016 Land USD 7,100,000 46,000,000 USD 8,200,000 69,000,000 Buildings Less: Accumulated Depreciation - Buildings (8,200,000) (13,470,000) Equipment 63,000,000 49,000,000 Less: Accumulated Depreciation - Equipment (13,000,000) (9,700,000) Bonds payable 11,500,000 During the year, a piece of land was purchased for cash. During the year, two buildings were also purchased. One was obtained by issuing par-value bonds, while the other was obtained in cash. Finally, a piece of equipment was sold for cash, resulting in a profit of USD 1,500,000. In 2016, the total depreciation expense recorded was USD 11,250,000. Given all of the information, a) how much cash did BOMM Company receive from the sale of equipment in 2016? and b) in the investing section of BOMM Company's 2016 statement of cashflow, how much net cash flow should be included? Show and explain the solution.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1MC

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