A company bought $950,000 of equipment with an expected life of 24 years and no residual value. After 20 years the company sold the equipment for $120,500. If the company uses straight-line depreciation and the indirect method is used to determine cash flows from operating activities, which of the following reflects how the sale of the equipment would be reported in the statement of cash flows?
a. $128,500 is recorded as a cash inflow from investing activities and $35,786 is added to convert net income to net cash flow provided by operating activities.
b. $128,500 is recorded as a cash inflow from investing activities and $35,786 is subtracted to convert net income to net cash flow provided by operating activities.
c. $128,500 is recorded as a cash inflow from operating activities.
d. $128,500 is recorded as a cash inflow from investing activities and no other sections of the statement are affected.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A company bought $950,000 of equipment with an expected life of 24 years and no residual value. After 20 years the company sold the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Technician A says that magnetism can cause electric current to flow in a conductor. Technician B says that magnetic lines of flux can never penetrate rubber insulation on a conductor. Which technician is correct?
Answers (1)
Active Alarm is replacing its old device manufacturing machine with a new one. The old machine is being sold for $200,000 and it has a book value of $50,000. The tax rate for Active Alarm is 40%.
Answers (1)
Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $13,500 (original cost of $31,000 less accumulated depreciation of $17,500) and a fair value of $9,300.
Answers (1)
Luster refers to the way a fiber, yarn, or fabric feels when handled.
Answers (1)
Which type of data does your company collect from customers or potential customers? A. Positioning data B. Market share data C. Primary data D. Secondary data
Answers (1)
New Questions in Business
During the first year of operations, Forrest Company paid $30,000 for direct materials and $50,000 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $15,000.
Answers (1)
Which statement about the Haymarket Affair is FALSE? a. Laborers were gathered at Haymarket Square to demonstrate for an eight-hour workday. b. The Knights of Labor was directly responsible for the violence that took place at Haymarket. c.
Answers (1)
Bonita Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2021.
Answers (1)
The four major competitive structures include all buta) monopoliesb) oligopoliesc) brandd) pure competitione) monopolistic competition
Answers (1)
Plastic Company purchased 100 percent of Spoon Company's voting common stock for $648,000 on January 1, 20X4. At that date, Spoon reported assets of $690,000 and liabilities of $230,000.
Answers (1)