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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Providence Company sold equipment for $25,000 cash. The equipment had originally cost $35,000 and had accumulated depreciation of $15,000. Prepare the spreadsheet entry (in journal entry format) to record this transaction for Providence’s statement of cash flows.

To determine

Journalize spread sheet entry to record equipment sold.

Explanation

Statement of cash flows: Cash flow statement reports all the cash transactions which are responsible for inflow and outflow of cash. The results of these transactions are reported as ending balance of cash at the end of reported period. Statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities.

Worksheet: A worksheet is a spreadsheet used while preparing a financial statement. It is a type of form having multiple columns and it is used in the adjustment process. The use of a worksheet is optional for any organization. A worksheet can neither be considered as a journal nor a part of the general ledger.

Equipment: Equipment means tangible property other than building and land that is used in business operations. Equipment is not considered as current asset instead, it is classified as long term asset. Examples of equipment are machinery, tools and vehicle.

Record spread sheet entry in journal entry format for equipment sold...

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