Atkins Corporation has provided the following information for the year ended December 31,2010:
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 on the equipment recorded 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

Atkins Corporation has provided the following information for the year ended December 31,2010:
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 on the equipment recorded 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

Quizplus · Accepted Answer

The sale of the equipment resulted in a cash flow of $30,000. The selling price ($30,000) exceeded the equipment book value* ($20,000) by the gain ($10,000).*Cost ($50,000) - Accumulated depreciation ($65,000 - $35,000)

Atkins Corporation Has Provided the Following Information for the Year