The following four events affecting property, plant and equipment, and intangible assets, occurred during the current year for a firm:
(i.) Purchased equipment for $50,000.
(ii)) Successfully defended a patent infringement suit costing the firm $60,000 in legal fees this year; as a result, the firm has sole rights to the patent.
(iii.) Capitalized and paid $30,000 of interest on a building under construction which is to house the firm's new offices.
(iv)) Received $100,000 in casualty insurance proceeds as a result of fire damage to one of the firm's factories.
What is the net effect on investing cash flow of the above transactions for the current year?
A) $10,000 increase
B) $110,000 decrease
C) $140,000 decrease
D) $40,000 decrease

Question

The following four events affecting property, plant and equipment, and intangible assets, occurred during the current year for a firm: 
(i.) Purchased equipment for $50,000.
(ii)) Successfully defended a patent infringement suit costing the firm $60,000 in legal fees this year; as a result, the firm has sole rights to the patent.
(iii.) Capitalized and paid $30,000 of interest on a building under construction which is to house the firm's new offices.
(iv)) Received $100,000 in casualty insurance proceeds as a result of fire damage to one of the firm's factories.
What is the net effect on investing cash flow of the above transactions for the current year?
A) $10,000 increase
B) $110,000 decrease
C) $140,000 decrease
D) $40,000 decrease

Quizplus · Accepted Answer

The Answer of The following four events affecting property, plant and equipment, and intangible assets, occurred during the current year for a firm: 
(i.) Purchased equipment for $50,000.
(ii)) Successfully defended a patent infringement suit costing the firm $60,000 in legal fees this year; as a result, the firm has sole rights to the patent.
(iii.) Capitalized and paid $30,000 of interest on a building under construction which is to house the firm's new offices.
(iv)) Received $100,000 in casualty insurance proceeds as a result of fire damage to one of the firm's factories.
What is the net effect on investing cash flow of the above transactions for the current year?
A) $10,000 increase
B) $110,000 decrease
C) $140,000 decrease
D) $40,000 decrease

The Following Four Events Affecting Property, Plant and Equipment, and Intangible