Atkins Corporation has provided the following information for the year ended December 31, 2014: • The equipment account balance increased $200,000.
• The equipment accumulated depreciation account increased $35,000.
• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
• Depreciation expense recorded on the equipment during the year was $65,000.
How much was the investing activities cash inflow from the sale of the equipment? Assume that the equipment purchase and sale resulted in cash flows.
A) $30,000.
B) $60,000.
C)$40,000.
D)$50,000.

Question

Quizplus · Accepted Answer

The investing activities cash inflow from the sale of the equipment is $40,000. This is calculated as follows:Sale price of equipment: $50,000Less: Book value of equipment (cost - accumulated depreciation): $50,000 - $35,000 = $15,000Gain on sale of equipment: $10,000Cash inflow from sale of equipment: $50,000 - $15,000 = $40,000

Atkins Corporation Has Provided the Following Information for the Year