The Following Information Was Extracted from the Records of Ustinof

question 10

Multiple Choice

The following information was extracted from the records of Ustinof Limited:
Opening balance of equipment, $360 000
Closing balance of equipment, $400 000
Cost of new equipment, $80 000
Proceeds from sale of equipment, $6000 (Cost $40 000; Carrying amount $10 000)
The total cash flows from investing activities is determined as:

• A) $40 000 cash outflow.
• B) $74 000 cash outflow.
• C) $76 000 cash outflow.
• D) $80 000 cash outflow.

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Definitions:

IRS Method

Refers to specific guidelines and procedures established by the Internal Revenue Service for calculating taxes, deductions, and other tax-related matters.

Mortgage Interest

The interest charged on a loan used to purchase a property, which is often tax-deductible for homeowners.

Vacation Home Properties

Real estate properties owned for personal use as a vacation getaway, which may also generate rental income.

Primarily Rental

Refers to property or real estate primarily used for rental purposes, where the primary intent is to generate rental income from tenants.