Use the Table for the Question(s)below

question 119

Multiple Choice

Use the table for the question(s) below.
AOS Industries Statement of Cash Flows for 2015

-Consider the above statement of cash flows.In 2015,AOS Industries had contemplated buying a new warehouse for $2 million,the cost of which would be depreciated over 10 years.If AOS Industries has a tax rate of 25%,what would be the impact on the amount of cash held by AOS at the the end of the 2015?

• A)It would have $2,00,000 less cash at the end of 2015.
• B)It would have $1,950,000 less cash at the end of 2015.
• C)It would have $150,000 less cash at the end of 2015.
• D)It would have an additional $50,000 in cash at the end of 2015.
• E)It would have $1,800,000 less cash at the end of 2015.

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Definitions:

Partial Equity Method

An accounting approach used for investments in associates where the investment is recorded at cost and adjusted for the investor's share of profit or losses.

Initial Value Method

An accounting method that records investments at their original purchase cost without adjusting for changes in market value.

Net Position

Net Position represents the difference between an entity's assets and liabilities, indicating the financial health or net worth of an entity.

Fund Balance

The difference between the assets and liabilities in a governmental fund, representing the net assets available for spending.