The Cash Inflow from the Disposal of a Long-Term Asset

question 48

Multiple Choice

The cash inflow from the disposal of a long-term asset at a gain is equal to the ________.

• A)amount of the gain plus the tax paid on the gain
• B)amount of the gain
• C)selling price of asset plus the tax paid on the gain
• D)selling price of asset minus the tax paid on the gain

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Definitions:

Prior Service Cost

Costs recognized when a pension plan is amended to increase benefits for employee service in prior periods, typically amortized over time.

Unrecognized Net Gain

A profit that has been realized but not yet recorded in the financial statements of a company.

Projected Benefit Obligation

The present value of estimated future pension benefits owed to employees, based on expected salary increases.

Prior Service Cost

Costs that arise when a pension plan is amended to increase benefits for employee service provided in prior periods, recognized over the service periods of affected employees.