CFI Mastered it? Are you sure? Try this....

CFA Level I
#1

I thought I did… until I saw this. 2006 2005 PPE 70,000 78,000 less accum dep (30,000) (24,000) loss on sale of equipment : (2,000) cost of equipment sold: 15,000 depreciation expense for the year: 11,000 CFI increased by: a) 1,000 b) 3,000 c) 8,000 d) 14,000 (there is a pro forma balance sheet and income statement to be used for CFO and CFF but chose not to ask because it’s pretty easy by now…

#2

C or D not sure : (

#3

i say d but it’s a guess between c and d

#4

I will say C dep is a non-cash charge

#5

yeah i thought you dont even consider deprec with CFI? shouldnt it just be the change in PPE and asset sold? enough! what is the answer?

#6

beginning acc. dep + dep. exp - end = acc. dep on eq sold 24000 + 11000 - 30000 = 5 = acc. dep on equip sold historical cost - acc dep sold = 15000 - 5000 = 10000 = b.v. of eq sold 10,000 sold, 2000 loss, c) 8,000

#7

beautiful!

#8

wow, nice.

#9

A

#10

I’ve only got that CAPEX is $25,000

#11

wait, i dont get this, is there something missing? If you sold an asset that was recorded on your books at 15 and there was a loss of 2, then you sold the asset for 13. This would flow to CFI.

#12

hmmm confident are we?

#13

ahh the historical cost was 15, i thought it was recroded on the books at 15 including depn

#14

mib20 Wrote: ------------------------------------------------------- > wait, i dont get this, is there something missing? > If you sold an asset that was recorded on your > books at 15 and there was a loss of 2, then you > sold the asset for 13. This would flow to CFI. that was the historical cost of the asset, not taking into account depreciation that has been accumulated on it what you are talking about is book value edit:beaten

#15

supersharp: what about new equipment purchased for 7000 here is the rest of the part opening ppe + add - sale = closing ppe 78000 + x - 15000 = 70000 x= 7000 cfi = cash for sale of ppe - purchased ppe cfi = 8000-7000 cfi = 1000 A

#16

A) 1000 Beg Accumulated Dep + Current Dep Exp - Dep exp on equipment sold = End Accum Dep 24000 + 11000 - x = 30000 x=5000 BV sold equipment = 15000 - 5000 Selling Price= 10000-2000= 8000 Beg Gross PPE + Purchses - Sales= End Gross PPE 78000 + P - 15000 = 70000 P= 7000 CFI= 8000-7000=1000 Is this correct?

#17

Ouch.

#18

Hey! Madanalyst!! We agree… :slight_smile:

#19

you two are right, i didn’t see purchases explicitly stated so i assumed there were none

#20

Mad you’re a genius i stopped at 8000 too… didn’t think about expenditure. peeps watch out on saturday cheers