Equipment with a Cost of $20,000 and a Book Value

question 40

Multiple Choice

Equipment with a cost of $20,000 and a book value of $6,000 was sold during the year for cash of $18,000.Additional equipment was purchased during the year for cash.
The company uses the indirect method in preparing the statement of cash flows.What is the amount of depreciation expense that will be reported in the operating activities section of the statement?

• A)$8,000
• B)$22,000
• C)$14,000
• D)$20,000

---

Definitions:

Propositional Interpretation

The process of understanding and giving meaning to different statements or propositions.

Semantic Interpretation

The process of deducing the meanings of words, sentences, or symbols within their particular context and understanding their intended message.

Additive Empathic Response

A communication strategy where the responder not only shows understanding towards the speaker's feelings but also adds their own supportive insight or emotion to the interaction.

Semantic Interpretations

An analysis process focusing on understanding the meaning of words, phrases, and sentences in a language.