value 100 points E1221 Supplement 12A Determining Cash Flows

value: 1.00 points E12-21 (Supplement 12A) Determining Cash Flows from the Sale of Property [LO 12-S1] Cedar Fair operates amusement parks in the United States and Canada. During fiscal 2013, it reported the following (in millions) From the income statement: Loss (gain) on sale of equipment Deprecitation expense Impairment of equipment From the balance she Equipment, beginning Equipment, ending Accumulated depreciation, beginning Accumulated depreciation, ending $ (9) 151 16 1,580 1,565 1,225 1,263 Equipment costing $133 was purchased during the year Required For the equipment that was disposed of during the year, compute the following: (a) its original cost, (b) its accumulated depreciation, and (c) cash received from the disposal. (Enter your answers in millions.) $ in million (a) Equipment Solo (b) Accumulated Depreciation-Equipment (c) Cash Received from Sale

Solution

Solution:

a. Original cost of equipment sold =Beginning equipment + Equipment purchased - Ending equipment

= $1,580 + $133 - $1,565 = $148

b. Accumualted depreciation on equipment disposed off = Beginiing accumulated depreciation + Depreciation expense for the year + Impairement loss - Ending accumulated depreciation

= $1,225 + $151 + $16 - $1,263 = $129

c. Cash received from sale of equipment = Book value of equipment - Loss on sale of equipment

= $148 - $129 - $ 9 = $10