The records of Count Bases Pizzas showed the following.
30 June 13 30 June 14
Pizza ovens and equipment $49 000 $53 000
Accumulated depreciation ovens and equipment 10 000 12 000
Cost of equipment sold 5000
Carrying value of equipment sold 3000
Proceeds of sale of equipment 4500
What is the investing cash outflow for equipment for the year ending 30 June 2014?

Question

Quizplus · Accepted Answer

To calculate the investing cash outflow for equipment, we need to consider the following:
- Equipment purchased: This can be calculated by taking the difference between the cost of equipment at 30 June 14 and 30 June 13, and adding back the accumulated depreciation at 30 June 13, as follows: 
Equipment purchased = (53,000 - 49,000 + 10,000) = $14,000
- Proceeds from sale of equipment: This is given as $4,500
- Carrying value of equipment sold: This is given as $3,000

Therefore, the net investing cash outflow for equipment is:
14,000 - 4,500 + 3,000 = $12,500

Option B is the correct answer as it represents the equipment purchased during the year.

The Records of Count Bases Pizzas Showed the Following