Dreamboat Company had the following information for the year ended December 31, 20X6, and at December 31, 20X5: $$\begin{array} { l l l }
& \underline { 12 / 31 / 20 \times 6 } & \underline { 12 / 31 / 20 \times 5 } \
\text { Fixed ass ets } & \$ 186,000 & \$ 156,000 \
\text { Accumulated depreciation } & ( 62,000 ) & ( 54,000 )
\end{array}$$ Depreciation expense for 20X6 was $18,000. Equipment which originally cost $20,000 with accumulated depreciation of $10,000 was sold at a $3,000 loss.
Required:
Determine how these events would appear on Dreamboat Company's statement of cash flows for the year ended December 31, 20X6, assuming that Dreamboat Company uses the direct method.

Question

Dreamboat Company had the following information for the year ended December 31, 20X6, and at December 31, 20X5: $$\begin{array} { l l l } 
& \underline { 12 / 31 / 20 \times 6 } & \underline { 12 / 31 / 20 \times 5 } \
\text { Fixed ass ets } & \$ 186,000 & \$ 156,000 \
\text { Accumulated depreciation } & ( 62,000 ) & ( 54,000 )
\end{array}$$ Depreciation expense for 20X6 was $18,000. Equipment which originally cost $20,000 with accumulated depreciation of $10,000 was sold at a $3,000 loss.
Required:
Determine how these events would appear on Dreamboat Company's statement of cash flows for the year ended December 31, 20X6, assuming that Dreamboat Company uses the direct method.

Quizplus · Accepted Answer

The Answer of Dreamboat Company had the following information for the year ended December 31, 20X6, and at December 31, 20X5: $$\begin{array} { l l l } 
& \underline { 12 / 31 / 20 \times 6 } & \underline { 12 / 31 / 20 \times 5 } \
\text { Fixed ass ets } & \$ 186,000 & \$ 156,000 \
\text { Accumulated depreciation } & ( 62,000 ) & ( 54,000 )
\end{array}$$ Depreciation expense for 20X6 was $18,000. Equipment which originally cost $20,000 with accumulated depreciation of $10,000 was sold at a $3,000 loss.
Required:
Determine how these events would appear on Dreamboat Company's statement of cash flows for the year ended December 31, 20X6, assuming that Dreamboat Company uses the direct method.

Dreamboat Company Had the Following Information for the Year Ended