[lester piggott]

2. Leslie Company sells business stationery imprinted with a customer's business name and address. To do this, it purchased a printing machine costing $48,000 on January 1, 2004. The machine has an expected useful life of five years and an estimated salvage value of $3,000. Leslie Company uses straight-line depreciation for all of its depreciable assets.
On August 1, 2007, the manager of the print shop was persuaded to purchase a new machine that operated more efficiently. The old machine was sold at that time for $5,000.
a. Calculate the depreciation expense recorded on the old machine for each year of use.
b. Calculate any gain or loss on disposal of the old machine.
c. Show how information about the printing machine transactions would be reported on the statement of cash flows for years 2004 through 2007. Assume the indirect format is used.
d. How would the information about the printing machine affect the income statement for years 2004 through 2007?


Exercise 11-9

A. The depreciation Expense recorded on the old machine each year was $9,600.
B. The calculated gain or loss on disposal of the old machine was based on a book value of $13,200 for the purchase date of August 1st,2007 and the amount received. Thus, $5,000-$13,200= a loss of $8,200.00
C.
Leslie CompanyStatement of Cash FlowsFrom Investing Activities2004-2007
2004
Purchase of Property and Equipment -48,000.00
Sale of Property and Equipment
Purchase of Investments
Sale of Investments
Net Cash Flow for Investing Activities

2005
Purchase of Property and Equipment
Sale of Property and Equipment
Purchase of Investments
Sale of Investments
Net Cash Flow for Investing Activities

2004
Purchase of Property and Equipment
Sale of Property and Equipment
Purchase of Investments
Sale of Investments
Net Cash Flow for Investing Activities

2006
Purchase of Property and Equipment
Sale of Property and Equipment
Purchase of Investments
Sale of Investments
Net Cash Flow for Investing Activities

2007
Purchase of Property and Equipment
Sale of Property and Equipment
Purchase of Investments
Sale of Investments $ 5,000.00
Net Cash Flow for Investing Activities

2008
Purchase of Property and Equipment
Sale of Property and Equipment
Purchase of Investments
Sale of Investments
Net Cash Flow for Investing Activities

D. The income statement of 2004 would show an operating expense of $48,000.00 in 2004. It would show a loss of $ 8,200.00 from the sale of long-term assets in 2007. It would show an annual depreciation expense of $9,600.00. All of which would affect pretax income, income tax and net income.

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I've worked on this 6 hours and it still does not seem right. I need fresh ideas. Is my table really supposed to be that blank? I can't find anything in the book that should make me fill it up. But it still does not seem right.