Equipment with a cost of $20,000 and a book value of $6,000 was sold during the year for cash of $18,000.Additional equipment was purchased during the year for cash.
What was the amount of cash paid for purchases of equipment during the year?
A)$80,000
B)$86,000
C)$100,000
D)$62,000

Question

Equipment with a cost of $20,000 and a book value of $6,000 was sold during the year for cash of $18,000.Additional equipment was purchased during the year for cash.
What was the amount of cash paid for purchases of equipment during the year?
A)$80,000 
B)$86,000 
C)$100,000 
D)$62,000

Quizplus · Accepted Answer

Ending equipment = Beginning equipment + Purchases of equipment − Equipment sold
Purchases of equipment = Ending equipment − Beginning equipment + Equipment sold
= $420,000 − $340,000 + $20,000 = $100,000

Equipment with a Cost of $20,000 and a Book Value