Dover Co'S Comparative Balance Sheet Indicated That the Equipment Account Increased

question 68

Multiple Choice

Dover Co.'s comparative balance sheet indicated that the Equipment account increased by $40,000.Upon further investigation of the account changes,it is determined that Dover purchased equipment totaling $70,000 for the year.It also sold equipment with an original cost of $30,000 for $8,000 cash.Assuming these are the only transactions affecting the investing activities,Dover will report net cash flows provided by (used in) investing activities of:

• A) ($40,000).
• B) ($70,000).
• C) ($32,000).
• D) ($62,000).

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Definitions:

Cost of Goods Sold

The immediate expenses linked to the manufacturing of products a company sells, such as materials and labor.

Adjusted

Modified or changed to correct or alter a previous situation, figure, or account.

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from operating revenue, excluding taxes and interest.

Raw Materials Account

An account used to track the cost of raw materials not yet used in production in a company's inventory.