A Company Sells Used Equipment with a Book Value of $100,000

question 3

Multiple Choice

A company sells used equipment with a book value of $100,000 for $250,000 cash.How would this transaction affect the company's balance sheet?

• A) Equity rises $250,000;net plant and equipment falls $250,000.
• B) Cash rises $250,000;net plant and equipment falls $100,000;equity rises $150,000.
• C) Cash rises $250,000;accounts receivable falls $100,000;goodwill rises $150,000.
• D) Cash rises $250,000;net plant and equipment falls $250,000.

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Definitions:

User Applies

The process by which individuals utilize and implement tools, knowledge, or systems to achieve specific tasks.

Client Specification

Detailed requirements provided by a client regarding the desired features and standards for a project or product.

Resources

Assets, materials, or inputs used in the process of achieving goals or completing projects, including human skills, technology, and financial assets.

Mean

A statistical measure representing the average value of a set of numbers, calculated as the sum of all the values divided by the number of values.