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 Memorial Corporation. How much cash was paid for dividends 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 Memorial Corporation. How much cash was paid for dividends during 2014?

Quizplus · Accepted Answer

The amount of accumulated depreciation implies that the equipment had a book value of $20,000 ($50,000 - $30,000). Therefore, the gain on the sale of the equipment was $10,000 ($30,000 - $20,000). The sale of equipment did not affect the cash account directly. Therefore, the amount of cash paid for dividends during 2014 is unrelated to the equipment sale. The amount of cash paid for dividends is not given in the information provided.

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