Nelson Company collected the following data in its accounting records in 20B: No new equipment was purchased during the year. What was the cash inflow from the sale of equipment in 20B?
A) $600.
B) $1,000.
C) $3,900.
D) $900.

Question

Nelson Company collected the following data in its accounting records in 20B:  No new equipment was purchased during the year. What was the cash inflow from the sale of equipment in 20B?
A) $600. 
B) $1,000. 
C) $3,900. 
D) $900.

Quizplus · Accepted Answer

The beginning balance of equipment was $4,900 and the ending balance was $4,000. Therefore, equipment with a book value of $900 ($4,900 - $4,000) was sold. The cash inflow from the sale of this equipment is equal to the book value of the equipment sold, which is $900. Therefore, the correct answer is D.

Nelson Company Collected the Following Data in Its Accounting Records