Question

Indicate in general journal form how the items below would be entered in a worksheet for the preparation of the statement of cash flows. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) (a) Net income is $317,000. (b) Cash dividends declared and paid totaled $113,000. (c) Equipment was purchased for $104,000. (d) Equipment that originally cost $35,000 and had accumulated depreciation of $28,000 was sold for $8,600.

Answer 1

Answer and Explanation:

The journal entries are shown below:

a. Operating - net income $317,000

To Retained earnings $317,000

(Being the net income is recorded)

b. Retained earnings $113,000

To Financing - cash dividend $113,000

(Being the cash dividend declared is recorded)

c. Equipment $104,000

To Investing - purchase of equipment $104,000

(Being the equipment purchased is recorded)

d. Accumulated depreciation - equipment $28,000

Investing - sale of equipment $8,600

To Equipment $35,000

To Operating - gain on sale of equipment $1,600

(Being the accumulated depreciation is recorded)