The three accounts shown below appear in the general ledger of Herrick Corp. during 2014.
|
Equipment |
|||
|
Date |
Debit |
Credit |
Balance |
July 31 |
Balance Purchase of equipment 70,000 Cost of equipment constructed 53,000 Cost of equipment sold |
49,000 |
160,000 230,000 283,000 234,000 |
|
Accumulated Depreciation—Equipment |
|||
|
Date |
Debit |
Credit |
Balance |
|
Balance |
71,000 |
|
|
Nov. 10 |
Accumulated depreciation on equipment sold 30,000 |
41,000 |
|
|
Dec. 31 |
Depreciation for year |
28,000 |
69,000 |
|
Retained Earnings |
|||
|
Date |
Debit |
Credit |
Balance |
|
Balance |
105,000 |
|
|
Aug. 23 |
Dividends (cash) 14,000 |
91,000 |
|
|
Dec. 31 |
Net income |
77,000 |
168,000 |
Instructions
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of equipment was $7,000.