If a loss of $20,000 is incurred in selling (for cash) office equipment that cost $90,000 and had accumulated depreciation of $22,500, the total amount reported in the investing activities section of the statement of cash flows is
A) $87,500.
B) $47,500.
C) $67,500.
D) $70,000.

Question

Quizplus · Accepted Answer

The cash received from the sale of the office equipment would be the selling price, which is not given in the question. However, we can calculate the book value of the equipment, which is $90,000 - $22,500 = $67,500. Since the loss on the sale is $20,000, the selling price must be $67,500 - $20,000 = $47,500. Therefore, the total cash inflow from investing activities would be $47,500.

If a Loss of $20,000 Is Incurred in Selling (For