The records of Count Bases Pizzas showed the following. 30 June 15 30 June 16 Pi
ID: 2328429 • Letter: T
Question
The records of Count Bases Pizzas showed the following.
30 June 15 30 June 16
Pizza ovens and equipment $49 000 $53 000
Accumulated depreciation ovens and equipment 10 000 12 000
Cost of equipment sold 5 000
Carrying value of equipment sold 3 000
Proceeds of sale of equipment 4 500
What is the investing cash inflow for equipment sold during 2015/16?
Select one:
a. Proceeds of sale of equipment $4500
b. Cost of equipment sold $5000
c. Carrying value of equipment sold $3000
d. Equipment sold $4000
Explanation / Answer
The correct answer is Option 'a': Proceeds of sale of Equipment $ 4,500 is the actual investing cash inflow for Equipment sold during 2015-16.
Investing Cash Inflows refers to the transactions that are of investing nature and some cash is being received. Investing nature transactions that result in Cash INFLOW are:
>Sale OF Equipment,
>Sale of Investment.
In above case, Equipment is sold for $ 4,500 of proceed. This becomes the actual Investing Cash inflow for Equipment sold because this is the amount of Cash that has been received as a result of sale.
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