Atkins Corporation Has Provided the Following Information for the Year

question 21

Multiple Choice

Atkins Corporation has provided the following information for the year ended December 31, 2016: • The equipment account balance increased by $200,000 from the beginning of the year to the end of the year.
• The equipment accumulated depreciation account balance increased by $35,000 from the beginning of the year to the end of the year.
• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
• Depreciation expense recorded on the equipment during the year was $65,000.
Which of the following statements is incorrect with respect to preparation of the statement of cash flows? Assume that the equipment purchase and sale resulted in cash flows.

• A)A $30,000 cash inflow is reported from the equipment sale.
• B)Using the indirect method, net income is increased by the $65,000 depreciation expense.
• C)Using the indirect method, net income is decreased by the $10,000 gain on the sale of the equipment.
• D)A $60,000 cash inflow is reported from the equipment sale.

---

Definitions:

Watson

John B. Watson, an American psychologist who established the psychological school of behaviorism, emphasizing the study of observable behavior over the study of the mind.

Allen Memorial Hospital

A medical facility known for its contributions to psychiatric research and treatment, historically associated with McGill University.

Psychoanalysis

A therapeutic approach aimed at uncovering the unconscious mind to treat psychopathologies.

Criminally Insane

A legal term used to describe a person who is found to be not responsible for their crimes due to mental illness.