Your Company Owned Equipment with a Book Value of $120,000

question 188

Multiple Choice

Your company owned equipment with a book value of $120,000 that was sold during this accounting period for $30,500 in cash,and purchased new equipment for cash of $148,000.Your company would record a debit of:

• A) $148,000 and a credit of $30,500 to the cash account for a net cash inflow of $117,500.
• B) $148,000 and a credit of $89,500 to the cash account for a net cash inflow of $58,500.
• C) $30,500 and a credit of $148,000 to the cash account for a net cash outflow of $117,500.
• D) $89,500 and a credit of $148,000 to the cash account for a net cash outflow of $58,500.

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Definitions:

Total Fixed Costs

The sum of all costs that do not change with the level of output produced by a business, such as rent, salaries, and insurance.

The Barber Shop

This term commonly refers to a place where men can get their hair cut and sometimes other grooming services, serving as a social hub in many communities.

Fixed Input

A resource used in production that cannot be changed in the short term, such as buildings and machinery.

Short Run

A time period in economics during which at least one input, such as plant size or capital, is fixed and cannot be changed.