All-Rite Sold $133,500 in Used Equipment in 2015 and Replaced

question 377

Multiple Choice

All-Rite sold $133,500 in used equipment in 2015 and replaced it with $212,000 of new equipment. Depreciation for 2015 and $12,500. What is the net capital spending for 2015?

• A) $66,000
• B) $78,500
• C) $91,000
• D) $199,500
• E) $212,000

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Definitions:

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that is financed by stockholders' equity.

Total Liabilities

The combined amount of a company's short-term and long-term debts, representing claims against the company's assets by outsiders.

Stockholders' Equity

The value remaining in a company after liabilities are subtracted from assets, representing what is owned by the shareholders.

Debt-to-Equity Ratio

This ratio demonstrates the balance between debt and equity shareholders' equity in financing a company's resources.