Last year Aft charged $1,487,200 Depreciation on the Income Statement of Andrews
ID: 1175856 • Letter: L
Question
Last year Aft charged $1,487,200 Depreciation on the Income Statement of Andrews. If Aft sold a fully depreciated piece of equipment at a loss, the effect on Andrews's financial statements would be (all other items remaining equal): Select: 1 A) Increase Net Cash from operations B) Decrease Net Cash from operations on the Cash Flow Statement C) No impact on Net Cash from operations D) Just impact the Balance SheetLast year Aft charged $1,487,200 Depreciation on the Income Statement of Andrews. If Aft sold a fully depreciated piece of equipment at a loss, the effect on Andrews's financial statements would be (all other items remaining equal): Select: 1 A) Increase Net Cash from operations B) Decrease Net Cash from operations on the Cash Flow Statement C) No impact on Net Cash from operations D) Just impact the Balance Sheet
Last year Aft charged $1,487,200 Depreciation on the Income Statement of Andrews. If Aft sold a fully depreciated piece of equipment at a loss, the effect on Andrews's financial statements would be (all other items remaining equal): Select: 1 A) Increase Net Cash from operations B) Decrease Net Cash from operations on the Cash Flow Statement C) No impact on Net Cash from operations D) Just impact the Balance Sheet
Explanation / Answer
A fully depreciated piece of equipment will not have a book value and so cannot be sold at operating loss.
Therefore C)No impact on Net Cash from operations.
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