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 What was the amount of investing activities cash inflow from the sale of the equipment? Assume that the equipment purchase and sale resulted in cash flows. A- $40,000 B- $50,000 C- $60,000 D- $30,000
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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
What was the amount of investing activities
A- $40,000
B- $50,000
C- $60,000
D- $30,000
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