A Machine with a Cost of $130,000 and Accumulated Depreciation

question 127

Multiple Choice

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:

• A) $50,000.
• B) $5,000.
• C) $45,000.
• D) Zero. This is an operating activity.
• E) Zero. This is a financing activity.

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Definitions:

Risk Of Loss

Pertains to the contractual and legal responsibility for the loss, damage, or destruction of goods during transportation or transaction.

Seller's Place

The designated location or business premises of the seller, relevant in transactions and legal agreements for determining delivery and risk of loss.

Merchant

An individual or company involved in the wholesale purchase and retail sale of goods for profit.

Purchaser

An entity or person who buys goods or services for consideration.