Question

Five years ago, Lewis Equipment purchased equipment costing $212,000. Two years ago, the firm paid $32.000 for updates to that equipment. This year, the firm sold the equipment for $189.000.

Which of these cash flows is (are) cash inflows to Lewis Equipment? Click the answer you think is right

a.$212,000 original cost plus $32,000 in updates

b.$32,000 updates

c.$212,000 original cost

d.$189,000 sale price

Answer 1

d.$189,000 sale price

Step-by-step explanation:

Investing activities: It records operations that include buying and selling long-term properties. The buying is a cash outflow whereas the sale is a cash inflow.

Since the equipment is sold this year for $189,000 that is to be reported in the investing activities under the cash flow statement. This amount should be recorded with a positive sign.

The other information is not relevant.