A manufacturer of plastic bottles for the medical trade purchases a new compression blow molder for its bottle production plant. How will the cost to the company of this piece of equipment be recorded?
A) It will be depreciated over time on the income statement and subtracted as a capital expenditure on the statement of cash flows.
B) It will be depreciated over time on the income statement and subtracted as Inventory on the statement of cash flows.
C) It will be depreciated over time on the income statement and therefore not be recorded separately on the statement of cash flows.
D) It will be subtracted from Gross Profit on the income statement and therefore, not be recorded separately on the statement of cash flows.
Answer: A
You might also like to view...
All of the following are factors that may affect a researcher's decision to select a particular data collection method, EXCEPT:
a. research objectives. b. information requirements. c. secondary data sources. d. desire for a random sample. e. budget availability.
If Trader's Paradise purchases euros expecting the value to rise and generate a profit for the company, it is engaging in currency ________
A) swap B) speculation C) hedging D) arbitrage