Silverago Incorporated, an international metals company, reported a loss on the sale of equipment of $2 million. In addition, the company’s income statement shows depreciation expense of $8 million and the cash flow statement shows capital expenditure of $10 million, all of which was for the purchase of new equipment. Using the following information from the comparative balance sheets, how much cash did the company receive from the equipment sale?
|
Balance Sheet Item |
12/31/2005 |
12/31/2006 |
Change |
|
Equipment |
$100 million |
$105 million |
$5 million |
|
Accumlated depreciation— equipment |
$40 million |
$46 million |
$6 million |
a. $6 million
b. $5 million
c. $1 million