Textbook Problem

Determining Cash Flows from Investing Activities

Burns Company’s 2019 and 2018 balance sheets presented the following data for equipment:

During 2019, equipment costing $41,000 with accumulated depreciation of $36,700 was sold for cash, producing a $3,200 gain.

Required:

1. Calculate the amount of depreciation expense for 2019.

2. Calculate the amount of cash spent for equipment during 2019.

3. Calculate the amount that should be included as a cash inflow from the disposal of equipment.