Impact of Operating and Investing Activities: Indirect Method
The following account balances were taken from the records of Roadhouse Corp. for the past two years:
|
December 31
|
|
2012
|
2011
|
|
Plant and equipment
|
$750,000
|
$500,000
|
|
Accumulated depreciation
|
160,000
|
200,000
|
|
Patents
|
92,000
|
80,000
|
|
Retained Earnings
|
825,000
|
675,000
|
Other information available for 2012:
- Net income for the year was $200,000
- Depreciation expense on plant and equipment $50,000
- Plant and equipment with an original cost of $150,000 was sold for $64,000 (you will need to determine the book value of the assets sold)
- Amortization expense on patents was $ 8000
- Both new plant and equipment and patents were purchased during the year.
Fill in the Blanks on these T-Accounts
Accumulated Depreciation
|
Sale of Plant and equipment ________________
|
Beginning Balance _______________________
Depreciation Expense ______________________
|
Ending Balance _______________________
Plant and Equipment
|
Beginning Balance _______________________
Purchases ______________________________
|
Sale of Plant and Equipment __________________
|
Ending Balance __________________________
Patents
|
Beginning Balance _______________________
Purchase of Patent_______________________
|
Amortization Expense ______________________
|
Ending Balance _____________________