Reference no: EM132490798

Atkins Corporation has provided the following information for the year ended December 31, 2019:

1. The equipment account balance increased by $223,000 from the beginning of the year to the end of the year.
2. The equipment accumulated depreciation account balance increased by $37,300 from the beginning of the year to the end of the year.
3. Equipment costing $54,600 was sold during the year resulting in a $13,450 gain.
4. Depreciation expense recorded on the equipment during the year was $68,450.

Question 1: Which of the following statements is correct with respect to determining cash flow from investing activities? Assume that the equipment purchase and sale resulted in cash flows.

Multiple Choice

Option 1: A $54,600 cash outflow is reported for the equipment sale.

Option 2: A $277,600 cash outflow is reported for equipment purchases.

Option 3: A $68,050 cash inflow is reported from the equipment sale.

Option 4: A $223,000 cash outflow is reported for equipment purchases