QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

49. Assume U.S. GAAP (generally accepted accounting principles) applies unless

otherwise noted.

At the end of the year, a company sold equipment for $30,000 cash. The

company paid $110,000 for the equipment several years ago and had recorded

accumulated depreciation of $70,000 at the time of its sale. All else equal, the

equipment sale will result in the company’s cash flow from:

A. investing activities increasing by $30,000.

B. investing activities decreasing by $10,000.

C. operating activities being $10,000 less than net income.