The Following Four Events Affecting Property, Plant and Equipment, and Intangible

question 1

Multiple Choice

The following four events affecting property, plant and equipment, and intangible assets, occurred during the current year for a firm:
(i.) Purchased equipment for $50,000.
(ii) ) Successfully defended a patent infringement suit costing the firm $60,000 in legal fees this year; as a result, the firm has sole rights to the patent.
(iii.) Capitalized and paid $30,000 of interest on a building under construction which is to house the firm's new offices.
(iv) ) Received $100,000 in casualty insurance proceeds as a result of fire damage to one of the firm's factories.
What is the net effect on investing cash flow of the above transactions for the current year?

• A) $10,000 increase
• B) $110,000 decrease
• C) $140,000 decrease
• D) $40,000 decrease

---

Definitions:

Elements Required

Refers to the essential components or conditions necessary for a particular process, agreement, or legal action to be valid or effective.

Libel

A false and malicious published statement that damages someone's reputation.

Slander

Spoken defamation.

Mass Communication

The process of creating, sending, receiving, and analyzing messages to a large audience through various media channels.