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

question 32

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.
What was the amount of cash paid for purchases of equipment during the year?

• A)$80,000
• B)$86,000
• C)$100,000
• D)$62,000

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Definitions:

Yield To Maturity

An investor's annualized return on a bond if held to its maturity date, considering all coupon payments and the principal repayment.

Zero Coupon Bond

A debt security that doesn't pay periodic interest but is traded at a deep discount, providing profit at maturity when the bond is redeemed for its full face value.

Current Yield

The annual income (interest or dividends) divided by the current price of the security.

Coupon Bond

A type of bond that pays the holder periodic interest payments at a fixed rate (the coupon rate) before maturing, at which point the principal or face value is repaid.