Question

Your company owned equipment with a book value of $120,000 that was sold during this accounting period for $30,500 in cash, and purchased new equipment for cash of $148,000. Your company would record a debit of:

A) $148,000 and a credit of $30,500 to the cash account for a net cash inflow of $117,500.

B) $148,000 and a credit of $89,500 to the cash account for a net cash inflow of $58,500.

C) $30,500 and a credit of $148,000 to the cash account for a net cash outflow of $117,500.

D) $89,500 and a credit of $148,000 to the cash account for a net cash outflow of $58,500.

Answer

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