DETERMINING CASH FLOWS FROM INVESTING ACTIVITIES
Burns Company's 2009 and 2008 balance sheets presented the following data for equipment:
| |
12/31/2009 |
12/31/2008 |
|
Equipment
|
$260,000
|
$225,000
|
|
Accumulated depreciation
|
115,000
|
92,000
|
|
Book value
|
$145,000
|
$133,000
|
During 2009, equipment costing $35,000 with accumulated depreciation of $30,000 was sold for cash, producing a $4,400 gain.
Required:
1. Calculate the amount of depreciation expense for 2009.
2. Calculate the amount of cash spent for equipment during 2009.
3. Calculate the amount that should be included as a cash inflow from the sale of equipment.