Salsedo Corporation's balance sheet and income statement appear below: Cash dividends were $9. The company sold equipment for $15 that was originally purchased for $10 and that had accumulated depreciation of $5. It did not issue any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) investing activities for the year was:
A)($81)
B)($66)
C)$66
D)$15

Question

Salsedo Corporation's balance sheet and income statement appear below:   Cash dividends were $9. The company sold equipment for $15 that was originally purchased for $10 and that had accumulated depreciation of $5. It did not issue any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) investing activities for the year was:
A)($81) 
B)($66) 
C)$66 
D)$15

Quizplus · Accepted Answer

The net cash provided by (used in) investing activities can be calculated as follows:
Sale of equipment = $15
Less: Original cost of equipment = $10
Less: Accumulated depreciation = $5
Gain on sale of equipment = $0 (since the selling price is equal to the net book value)
Net cash provided by investing activities = $15 - $10 - $5 = $0
However, since the company paid cash dividends of $9, the net cash provided by (used in) investing activities is:
Net cash provided by (used in) investing activities = $0 - $9 = -$9
Therefore, the correct answer is B) ($66).

Salsedo Corporation's Balance Sheet and Income Statement Appear Below