Atkins Corporation has provided the following information for the year ended December 31,2010:
The equipment account balance increased $200,000.
The equipment accumulated depreciation account increased $35,000.
Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
Depreciation expense on the equipment recorded during the year was $65,000.
Which of the following statements is correct with respect to cash flow from investing activities determination? Assume that the equipment purchase and sale resulted in cash flows.
A)A $60,000 cash inflow is reported from the equipment sale.
B)A $200,000 cash outflow is reported for equipment purchases.
C)A $50,000 cash outflow is reported for the equipment sale.
D)A $250,000 cash outflow is reported for equipment purchases.

Question

Atkins Corporation has provided the following information for the year ended December 31,2010:
 The equipment account balance increased $200,000.
The equipment accumulated depreciation account increased $35,000.
 Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
Depreciation expense on the equipment recorded during the year was $65,000.
Which of the following statements is correct with respect to cash flow from investing activities determination? Assume that the equipment purchase and sale resulted in cash flows.
A)A $60,000 cash inflow is reported from the equipment sale.
B)A $200,000 cash outflow is reported for equipment purchases.
C)A $50,000 cash outflow is reported for the equipment sale.
D)A $250,000 cash outflow is reported for equipment purchases.

Quizplus · Accepted Answer

Equipment purchases ($250,000) = Equipment account increase ($200,000) + The cost of the equipment sold ($50,000)

Atkins Corporation Has Provided the Following Information for the Year