Selected information from the company's financial records is presented below:
During 2014, the company sold equipment with a cost of $50,000 and accumulated depreciation of $30,000. A gain of $10,000 was recognized on the sale of the equipment. This was the only equipment sale during the year.
-Refer to Metalcrafts, Inc. Assume that all purchases of equipment were paid with cash. How much cash was paid to purchase equipment during 2014?

Question

Selected information from the company's financial records is presented below:
  During 2014, the company sold equipment with a cost of $50,000 and accumulated depreciation of $30,000. A gain of $10,000 was recognized on the sale of the equipment. This was the only equipment sale during the year.
-Refer to Metalcrafts, Inc. Assume that all purchases of equipment were paid with cash. How much cash was paid to purchase equipment during 2014?

Quizplus · Accepted Answer

The cash paid for equipment can be determined by the change in equipment value on the balance sheet, assuming no other transactions like sales or disposals. If the equipment increased by $150,000, then $150,000 in cash was paid for the purchase.

Selected Information from the Company's Financial Records Is Presented Below