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:

Promissory Note

A written promise to pay a specified sum of money to a certain individual or entity at a specified time or on demand, under specified conditions.

Fraud in the Inducement

A deceitful practice where a person is misled through misrepresentation to enter into a contract or agreement.

Essential Nature

The fundamental qualities or characteristics that define the true identity or core purpose of something.

Autograph Fraud

Involves the forgery or misrepresentation of a celebrity or notable individual's signature with the intent to deceive or profit.