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NEW QUESTION: 1
Consider the following:
Machinery, beginning balance $114,000 Machinery, ending balance $100,000 Accumulated Depreciation,
Machinery, beginning balance $ 60,000 Accumulated Depreciation, Machinery, ending balance $ 64,000
Depreciation expense $ 15,000
What was the amount of cash inflow from the sale of old machinery during the year? Assume no other transactions affected the Machinery account and that the sale of the machinery did not result in a gain or loss on disposal.
A. $11,000
B. $14,000
C. $ 3,000
Answer: C
Explanation:
When machinery is removed from the ledger, the accumulated depreciation related to the machinery is debited. In this case, the debit was $60,000 + $15,000 - $64,000 = $11,000. The machinery account decreased by $14,000 ($114,000 - $100,000). The sale of the machinery involved a debit to
Accumulated Depreciation for $11,000, a debit to Cash for $3,000, and a credit to Machinery for $14,000.