Allison Controls Ltd

question 14

Multiple Choice

Allison Controls Ltd. follows a policy of paying cash for everything it buys. At the end of 2011 Allison had a balance in its machine account of $90,000 and the associated accumulated depreciation account of $45,000. Similar amounts at the end of 2010 were $100,000 and $50,000 respectively. During 2011 Allison sold a machine for $10,000. It had cost $25,000 and had accumulated depreciation of $10,000 at the time of the sale. How would these amounts appear on the cash flow statement?

• A) Operating activities $(5,000); investing activities $(10,000); financing activities $15,000.
• B) Operating activities $0; investing activities $(5,000); financing activities $0.
• C) Operating activities $25,000; investing activities $35,000; financing activities $90,000.
• D) Operating activities $0; investing activities $0; financing activities $15,000.
• E) Operating activities $5,000; investing activities $0; financing activities $0.

---

Definitions:

Matching Law

When an animal has free access to two different schedules of reinforcement; its response is proportional to the level of reinforcement available on each schedule.

Behavioral Contrast

A phenomenon where the rate of response varies in accordance with a change in the reinforcement provided in an alternate situation.

Matching Law

A principle that states that the proportion of responses directed towards alternatives is equal to the proportion of reinforcements obtained from those alternatives.

Reinforcement

A process in behaviorism where a behavior becomes more likely to occur in the future due to the consequences that follow the behavior.