The cash flow statement of the United Company is in process for 2015. The United Company is reporting the following balances:
$\begin{array}{lrrrr}
&12/31/14&12/31/15\
\text { Equipment } & \$ 100,000 & \$ 170,000 \
\text { Loss on sale of equipment } & 0 &10,000 \
\text { Accumulated depreciation-equipment } & 75,000 & 95,000
\end{array}$
During 2015, United sold equipment costing $30,000 for $12,000 and made several purchases of new equipment for cash.
-Equipment purchases in 2015 were
A)$30,000.
B)$70,000.
C)$100,000.
D)$120,000.

Question

The cash flow statement of the United Company is in process for 2015. The United Company is reporting the following balances:
$\begin{array}{lrrrr}
&12/31/14&12/31/15\
\text { Equipment } & \$  100,000 & \$ 170,000 \
\text { Loss on sale of equipment } & 0 &10,000 \
\text { Accumulated depreciation-equipment } & 75,000  & 95,000
\end{array}$
During 2015, United sold equipment costing $30,000 for $12,000 and made several purchases of new equipment for cash.
-Equipment purchases in 2015 were
A)$30,000.
B)$70,000.
C)$100,000.
D)$120,000.

Quizplus · Accepted Answer

The increase in equipment from $100,000 to $170,000 is $70,000. Since equipment costing $30,000 was sold, the total purchases must have been $100,000 ($70,000 increase + $30,000 sold).

The Cash Flow Statement of the United Company Is in Process