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Question - On January 1, Year 1, Bacco Company had a balance of $60,600 in its Delivery Equipment account. During Year 1, Bacco purchased delivery equipment that cost $24,500. The balance in the Delivery Equipment account on December 31, Year 1, was $61,206. The Year 1 income statement reported a gain from the sale of equipment for $3,600. On the date of sale, accumulated depreciation on the equipment sold amounted to $14,500.
Required -
a. Determine the original cost of the equipment that was sold during Year 1.
b. Determine the amount of cash flow from the sale of delivery equipment that should be shown in the investing activities section of the Year 1 statement of cash flows.
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