A company's unearned rental revenue account increases from the beginning to the end of the year. In the statement of cash flows using the direct method, the cash collected from tenants would be
A) rent revenue plus unearned rent revenue at the beginning of the year.
B) rent revenue plus the increase in unearned rent revenue during the year.
C) rent revenue minus the increase in unearned rent revenue during the year.
D) equal to rental revenue on the income statement.
B
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Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $360,000 or a new model 220 machine costing $340,000 to replace a machine that was purchased 7 years ago for $348,000. The old machine was used to make product I43L until it broke down last week. Unfortunately, the old machine cannot be repaired.Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L.Management also considered, but rejected, the alternative of simply dropping product I43L. If that were done, instead of investing $340,000 in the new machine, the money could be invested in a project that would return a total of $411,000. In making the decision to buy the
model 220 machine rather than the model 370 machine, the sunk cost was: A. $340,000 B. $348,000 C. $360,000 D. $411,000