How would the following affect the three financial statements?.
Fixed assets disposition:
-- Assume that the Company sold PP&E in 2015:
-- Sale proceeds - $70000
-- Original Cost - $100000
-- Depreciated cost (at the time of the sale) - $30000
| +460 | Don’t work at UBS - UBS Sucks | 45 | 13m |
| +330 | Article - UBS’ Investment Bank Keeps Losing Ground | 43 | 1d |
| +219 | Should My Intern Get a Return Offer? | 59 | 23h |
| +62 | Getting Laid in IB? | 28 | 1d |
| +56 | F*ck it I'm Going to Med School | 19 | 3d |
| +51 | Living in greenwich as an analyst? | 10 | 11h |
| +51 | Intern keeps sleeping at work - what to tell them | 24 | 58m |
| +36 | Incompetent and annoying co-intern | 17 | 17m |
| +33 | Quick Thoughts on CVC AI Sale Process | 5 | 3h |
| +30 | Nauseous every morning for past 3 years in IB, anyone else? | 20 | 16h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
BS: Increased liquidity - $70k of PPE swapped for cash CF: Increase in cash from investing activites of $100k IS: No impact, no gain/loss on sale
Here's my stab at it:
I/S: Other income or Gain on asset sales increases by 40K Net income increases by 40K
CF: CFO is decreased by 40K (Gain on asset sales) CF INV is increased by 70K (Proceeds from asset sales)
BS: Net PP&E decreases by 30K Cash increases by 70k
Not even sure how you arrived at that, but it isn't correct.
Well if I understood the question correctly, then the depreciated cost refers to the net book value (historical cost less accumulated depreciation). Therefore if I have it on my books at an NBV of 30K and I sell it for 70K, then I recognize a gain on disposal of 40K.
Agreed. http://www.accountingcoach.com/cash-flow-statement/explanation/8 pretty simple explanation here.
Misread depreciation cost
Eligendi id numquam modi vel rerum ipsam et occaecati. Aut necessitatibus perspiciatis numquam qui quis. Et corporis expedita et dolorum.
Inventore at consequuntur vero sint consectetur. Id fugiat totam praesentium et. Doloribus sint quos sunt accusantium ducimus nam deserunt ea. Dolore voluptas eum quia vel repellendus omnis.
Vel quis nemo qui ut velit autem necessitatibus. Nulla quo sit facere vero facere odio repellendus. Accusantium natus vel dolores quo quis qui. Id et consequatur omnis aut repudiandae sint.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...