6. On January 1,2018 , Schmidt Industries purchased a new paint sprayer for $400,000. The salvage value after 5 years is estimated to be $100,000. The sprayer is depreciated by straight line depreciation for 5 years. On December 31,2020, the sprayer is sold for $200,000. Which of the following is correct regarding the disposal of the sprayer? It results in a taxable gain of $100,000. It results in a taxable gain of $20,000. It results in a tax loss of $20,000. It results in a tax loss of $100,000. 7. When there is a trade-off to be made between relevance and reliability, such as in recording the purchase price of property that has a higher value than the price purchased, financial accounting tends to favor reliability, which leads to recording the asset at market value. reliability, which leads to recording the asset at purchase price. relevance, which leads to recording the asset at market value. relevance, which leads to recording the asset at purchase price. 8. During 2019 , Southampton Corp. had a net financing cash outflow of $12 million; a net operating cash inflow of $20 million; and a net decrease in the cash balance of $5 million. What was their net cash flow from investing? A net inflow of $3 million A net inflow of $8 million A net outflow of $13 million A net outflow of $25 million 59. Horan Industries purchased a parcel of land next to their existing plant for $700,000, in order to expand operations. The seller was reluctant to sell initially so to persuade them, Horan offered a price that was twice the market value of the land. According to the historic cost concept, how should the purchase be recorded on the balance sheet? It should be reported at the purchase price of $700,000 It should be reported at its fair market value of $350,000 It should be reported at the value provided by an independent appraiser It should be reported at $700,000 and immediately report a loss of $350,000