The following information was taken from the fınancial records of ABC Inc.: Equipment, December 31, Year 1 $300,000 Equipment, December 31, Year 2 400,000 Accumulated depreciation, December 31, Year 1 80,000 Accumulated depreciation, December 31, Year 2 60,000 During Year 2, the company sold equipment with a cost of $50,000 and accumulated depreciation of $30,000. A gain of $10,000 was recognized on the sale of the equipment. This was the only sale of equipment during Year 2. Refer to ABC Inc. Assume that all purchases of equipment were paid for with cash. How much cash was paid to purchase equipment during Year 2? O $200,000 O $150,000 O $50,000 O $250,000

The following information was taken from the fınancial records of ABC Inc.: Equipment, December 31, Year 1 $300,000 Equipment, December 31, Year 2 400,000 Accumulated depreciation, December 31, Year 1 80,000 Accumulated depreciation, December 31, Year 2 60,000 During Year 2, the company sold equipment with a cost of $50,000 and accumulated depreciation of $30,000. A gain of $10,000 was recognized on the sale of the equipment. This was the only sale of equipment during Year 2. Refer to ABC Inc. Assume that all purchases of equipment were paid for with cash. How much cash was paid to purchase equipment during Year 2? O $200,000 O $150,000 O $50,000 O $250,000

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 2CE

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Balance sheets for Brierwold Corporation follow: Additional transactions were as follows: a. Purchased equipment costing 50,000. b. Sold equipment costing 60,000, with a book value of 25,000, for 40,000. c. Retired preferred stock at a cost of 110,000. (The premium is debited to Retained Earnings.) d. Issued 10,000 shares of common stock (par value, 4) for 10 per share. e. Reported a loss of 15,000 for the year. f. Purchased land for 50,000. Required: Prepare a statement of cash flows using the indirect method.