Use the information below for Shorter Inc.for 2017 and 2018 to answer the following question: $\begin{array}{lr}
\text { Equipment, December } 31,2017 & \$ 65,000 \
\text { Equipment, December 31,2018 } & 72,000 \
\text { Accumulated depreciation, December 31,2017 } & 39,000 \
\text { Accumulated depreciation, December 31,2018 } & 30,000
\end{array}$During 2018,Shorter Inc.sold equipment with a cost of $30,000 and accumulated depreciation of $25,000.A gain of $3,000 was recognized on the sale of the equipment.This was the only equipment sale during the year.
Assume that all purchases of equipment were paid with cash.How much cash was paid by Shorter for the purchase of equipment during 2018?

A)$7,000
B)$30,000
C)$37,000
D)$72,000

Question

Use the information below for Shorter Inc.for 2017 and 2018 to answer the following question: $\begin{array}{lr}
\text { Equipment, December } 31,2017 & \$ 65,000 \
\text { Equipment, December 31,2018 } & 72,000 \
\text { Accumulated depreciation, December 31,2017 } & 39,000 \
\text { Accumulated depreciation, December 31,2018 } & 30,000
\end{array}$During 2018,Shorter Inc.sold equipment with a cost of $30,000 and accumulated depreciation of $25,000.A gain of $3,000 was recognized on the sale of the equipment.This was the only equipment sale during the year.
Assume that all purchases of equipment were paid with cash.How much cash was paid by Shorter for the purchase of equipment during 2018?

A)$7,000
B)$30,000
C)$37,000
D)$72,000

Quizplus · Accepted Answer

The cost of equipment increased from $65,000 to $72,000, indicating a $7,000 increase. However, since equipment costing $30,000 was sold, the total cash paid for new equipment is the sum of the increase in equipment cost ($7,000) and the cost of the equipment sold ($30,000), which equals $37,000.

Use the Information Below for Shorter Inc During 2018,Shorter Inc