Allen Company bought a new copy machine to be depreciated straight line for three years for use by sales personnel.Where would this purchase be reflected on the Statement of Cash Flows?
A)It would be an expense on the income statement,so it would be reflected in operating cash flows.
B)It would be an addition to property,plant and equipment,so it would be an investing activity.
C)It would be an addition to cash,so would be reflected in the change in cash.
D)It would be an increase in borrowing,so would be reflected in financing activities.
E)It would be a change in inventory,so would be reflected in operating activities.

Question

Quizplus · Accepted Answer

The purchase of a new copy machine to be depreciated over three years is an addition to property, plant, and equipment, which is an investing activity and would be reflected as such in the Statement of Cash Flows.

Allen Company Bought a New Copy Machine to Be Depreciated