Response to the following problem:
Assume the following income statement for the year ended December 31, 2017 and balance sheet at year-end:
Revenue $ -0-
Gain on sale of equipment 500
Net income $500
|
|
2017
|
2016
|
|
Equipment
|
$ -O-
|
$1,000
|
|
Accumulated depreciation-equipment
|
-0-
|
(600)
|
No equipment was purchased during the year. Equipment was sold for cash during the year.
Required:
1. Calculate the amount of cash for which the equipment was sold.
2. Prepare the journal entry to record the sale of the equipment.
3. Calculate the cash flow from operating activities and investing activities