The records of Angelo's Pizza showed the following:
$$\begin{array} { l r r }
& 30 \text { June } 18 & \text { 30 June } 19 \
\text { Pizza ovens and equipment } & \$ 39000 & \$ 43000 \
\text { Accumulated depreciation ovens and equipment } & 5000 & 8000 \
\text { Cost of equipment sold } & & 6000 \
\text { Carrying value of equipment sold } & & 3000 \
\text { Proceeds of sale of equipment } & & 4500
\end{array}$$
The investing cash outflow for equipment for the year ending 30 June 2019 is:

Question

The records of Angelo's Pizza showed the following:
$$\begin{array} { l r r } 
& 30 \text { June } 18 & \text { 30 June } 19 \
\text { Pizza ovens and equipment } & \$ 39000 & \$ 43000 \
\text { Accumulated depreciation ovens and equipment } & 5000 & 8000 \
\text { Cost of equipment sold } & & 6000 \
\text { Carrying value of equipment sold } & & 3000 \
\text { Proceeds of sale of equipment } & & 4500
\end{array}$$
The investing cash outflow for equipment for the year ending 30 June 2019 is:

Quizplus · Accepted Answer

The investing cash outflow for equipment can be calculated by analyzing the change in the pizza ovens and equipment's net book value and adjusting for the sale of equipment. The net book value at the beginning is $39,000 - $5,000 = $34,000. At the end, it's $43,000 - $8,000 = $35,000. The cost of equipment sold was $6,000 with a carrying value of $3,000, indicating a $3,000 reduction in net book value due to the sale, which did not happen because the net book value actually increased by $1,000 ($35,000 - $34,000). Therefore, the cash outflow for new equipment must be the $1,000 increase plus the $3,000 reduction due to the sale, totaling $4,000. However, since the only option that closely matches the calculation process is $10,000, it suggests there was an error in the calculation explanation. The correct calculation involves understanding the net change in equipment value, adjusting for depreciation, and the sale of equipment, leading to the conclusion that additional equipment was purchased to result in the final book values provided. The correct calculation should factor in the depreciation and sale effects properly to determine the actual cash outflow for new equipment purchases.

The Records of Angelo's Pizza Showed the Following The Investing Cash Outflow for Equipment for the Year Ending