I dont know why, but the answer to the asset sale $8k cash collection,cost $40k, accumulated depreciation, CFO question 5k less just clicked in the my head! I was tossing up between 27k or 37k for accumulated depreciation. I actually guessed 37k but now i think it was correct because Cost 40K Accum Dep 37K BV 3K Cash collection 8K Gain on sale 5K
you record gains/losses from sale of assets in CFO… (indirect method)
I guessed 37
The way I figured this was, since NI was 8k higher than CFO, there must have been a loss. So that rules out anything higher than 35k in accum depr, since it was sold for 5k. Since there was 8k more in CFO, then 27k + 5k = 32, leaving a diff of 8k for a loss, so I chose 27k.
I meant NI was 8k LOWER than CFO. That’s how you know there was a loss.
That’s how I did it as well. Had to think hard about it (some of that stuff for me is like facing West and having someone ask you to point towards the Southeast [which for me sometimes requires that I physically turn north and then point] - I don’t know if that made sense at all!). I probably looked like a nut with my eyes closed and lips moving!
That one had me thinking, too. I figured it out like this: Cost 40k Cash from sale 5k Difference between NI and CFO due to sale 8k Depreciation ?? First I was thinking they didn’t give me any info about depr. method or wheather it was sold at a gain/loss. So how do we get from NI to CFO: NI + derp./amort. - gains (sale PPE/LTI) + losses (Sale PPE/LTI) It had to be a loss that was added back. Depr. = 27k, so BV was 13k. Received 5k, results in a loss of 8k which was added back to get from NI to CFO. Just my 2 cents…
pppsss Wrote: ------------------------------------------------------- > That one had me thinking, too. I figured it out > like this: > > Cost 40k > Cash from sale 5k > Difference between NI and CFO due to sale 8k > Depreciation ?? > > First I was thinking they didn’t give me any info > about depr. method or wheather it was sold at a > gain/loss. > So how do we get from NI to CFO: > NI Yes, this question is definitely different to the one i had. Cost 40k Cash sale 8k Difference between NI and CFO 5k (CFO is 5k less than NI). As my above calc shows, If BV= 3, and you got 8k cash for it, then you make a cash profit of 5k. Sale of asset is not CFO so, assume CFO=0, then NI is greater than CFO by 5k. to get a BV=3, Accu Dep must be 37.
i got 27K i think can’t remember but that was a tricky one and i’m pretty sure i got it right and that 37K was the trap. I think it’s because it was a loss, so it was added back…but i forgot the logistics of the question.
if you took the 2020 exam the answer is 37 if you took the 1010 one it is 27. both are correct because both had different data. there was no trap unless you took the 1010 and answered 37
oh ok i took the 1010 one… well now i’m +1 but -2 from quant
@Dsylexic thx man, that’s 1+ for me…I had the 1010 AM. hope this is not the only one i can count in the bank!! so did they really hand out different papers to prevent cheating on the exam? that’s interesting… i had this girl sitting next to me on the exam saying her answers were a lot different from mine. she must have compared them while we were waiting for the papers to be collected.