Sample content EXERCISE 13-3 1. (a) Cash 10,000 Loss on Disposal of Plant Assets 2,000 Land 12,000 (b) The cash receipt ($10,000) is reported in the investing section. The loss ($2,000) is added to net income in the operating section. 2. (a) Cash 22,000 Common Stock 22,000 (b) The cash receipt ($22,000) is reported in the financing section. 3. (a) Depreciation Expense 14,000 Accumulated Depreciation— Buildings 14,000 (b) Depreciation expense ($14,000) is added to net income in the operating section. 4. (a) Salaries and Wages Expense 7,000 Cash 7,000 (b) Salaries and Wages expense is not reported separately on the statement of cash flows. It is part of the computation of net income in the income statement, and is included in the net income amount on the statement of cash flows. 5. (a) Equipment 9,000 Common Stock 1,000 Paid-in Capital in Excess of Par — Common Stock 8,000 (b) The issuance of common stock for equipment ($9,000) is

1. ACC 557 Week 9 Chapter 13 (E13 3 E13 4 E13 6 P13 3A)
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Sample content
EXERCISE 13-3
1. (a) Cash 10,000
Loss on Disposal of Plant Assets 2,000

2. Land 12,000
(b) The cash receipt ($10,000) is reported in the investing section. The loss
($2,000) is added to net income in the operating section.
2. (a) Cash 22,000
Common Stock 22,000
(b) The cash receipt ($22,000) is reported in the financing section.
3. (a) Depreciation Expense 14,000
Accumulated Depreciation—
Buildings 14,000
(b) Depreciation expense ($14,000) is added to net income in the operating
section.
4. (a) Salaries and Wages Expense 7,000
Cash 7,000
(b) Salaries and Wages expense is not reported separately on the statement of
cash flows. It is part of the computation of net income in the income statement, and
is included in the net income amount on the statement of cash flows.
5. (a) Equipment 9,000
Common Stock 1,000
Paid-in Capital in Excess of Par —
Common Stock 8,000
(b) The issuance of common stock for equipment ($9,000) is reported as a
noncash financing and investing activity at the bottom of the statement of cash
flows.

3. 6. (a) Cash 3,200
Accumulated Depreciation—Equipment 8,000
Equipment 10,000
Gain on Disposal of plant Assets 1,200
(b) The cash receipt ($3,200) is reported in the investing section. The gain
($1,200) is deducted from net income in the operating section
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Exercise 13-3
Your answer is correct.
Tim Latimer Corporation had the following transactions.
1.
Sold land (cost $12,000) for $10,000.
2.
Issued common stock at par value for $22,000.
3.
Recorded depreciation on buildings for $14,000.
4.
Paid salaries of $7,000.
5.
Issued 1,000 shares of $1 par value common stock for equipment worth $9,000.

4. 6.
Sold equipment (cost $10,000, accumulated depreciation $8,000) for $3,200.
For each transaction above, prepare the journal entry. (Credit account titles are
automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
1.
2.
3.
4.
5.
6.
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EXERCISE 13-4
BRACEWELL COMPANY
Partial Statement of Cash Flows

5. For the Year Ended December 31, 2014
Cas
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