Allison Controls Ltd

Multiple Choice

Allison Controls Ltd. follows a policy of paying cash for everything it buys. At the end of 2011 Allison had a balance in its machine account of $90,000 and the associated accumulated depreciation account of $45,000. Similar amounts at the end of 2010 were $100,000 and $50,000 respectively. During 2011 Allison sold a machine for $10,000. It had cost $25,000 and had accumulated depreciation of $10,000 at the time of the sale. How would these amounts appear on the cash flow statement?

A) Operating activities $(5,000) ; investing activities $(10,000) ; financing activities $15,000.
B) Operating activities $0; investing activities $(5,000) ; financing activities $0.
C) Operating activities $25,000; investing activities $35,000; financing activities $90,000.
D) Operating activities $0; investing activities $0; financing activities $15,000.
E) Operating activities $5,000; investing activities $0; financing activities $0.