Equipment That Cost $10,000 That Had a Book Value of $6,000

question 3

Multiple Choice

Equipment that cost $10,000 that had a book value of $6,000 was sold for $7,000. Data from the comparative balance sheets are:
$\begin{array}{lrr}&12/31/17&12/31/16\\\hline \text { Equipment } & \$ 420,000 & \$ 310,000 \\\text { Accumulated Depreciation } & 59,000 & 36,000\end{array}$

Equipment purchased during 2017 cost

• A)$120,000.
• B)$110,000.
• C)$145,000.
• D)$10,000.

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Definitions:

Purchase Allowances

Reductions in the price paid by a buyer to a seller, due to minor defects or quality issues with the goods provided.

Price Reduction

A decrease in the selling price of products or services, often to drive sales or clear inventory.

Prompt Payment

A financial discipline that involves settling debts quickly, often rewarded by suppliers with discounts.

Purchase Returns

Transactions where buyers return previously purchased merchandise to the seller, often because of defects or errors in the shipment.