The XYZ corporation purchased a large machine 5 years ago at a total cost of $40
ID: 2382276 • Letter: T
Question
The XYZ corporation purchased a large machine 5 years ago at a total cost of $400,000. The accumulated depreciation on this machine is $290,000. The corporation sold the machine at a $10,000 gain. What amount would be reported as cash flow from this sale? Answer a. $110,000 b. $300,000 c. $120,000 d. $400,000 The XYZ corporation purchased a large machine 5 years ago at a total cost of $400,000. The accumulated depreciation on this machine is $290,000. The corporation sold the machine at a $10,000 gain. What amount would be reported as cash flow from this sale? $110,000 $300,000 $120,000 $400,000 a. $110,000 b. $300,000 c. $120,000 d. $400,000Explanation / Answer
Book value of machine = Original cost - accumulated depreciation
= 400000 - 290000
= 110000
Sales price = Book value + gain
= 110000 + 10000 =120000
So, $120000 will be reported as cash flow from sale...
option C
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