equipment which cost $213,000 and had accumulated depreciation of $114,000 was s
ID: 2455419 • Letter: E
Question
equipment which cost $213,000 and had accumulated depreciation of $114,000 was sold for $111,000. This transaction should be shown on the statement of cash flows (indirect method) as a(n
deduction from net income of $12,000 and a $99,000 cash inflow from investing activities.
addition to net income of $12,000 and a $99,000 cash inflow from financing activities.
addition to net income of $12,000 and a $111,000 cash inflow from financing activities.
deduction from net income of $12,000 and a $111,000 cash inflow from investing activities.
Explanation / Answer
deduction from net income of $12,000 and a $111,000 cash inflow from investing activities. Cost of Equipment 213,000.00 Accumuated Depreciation 114,000.00 Net Book Value 99,000.00 Sale Value 111,000.00 Profit on Sale 12,000.00 Profit on Sale Would be deducted from Net income Under Operating Activities section under indirect Method (12,000.00) Sale Value of Equipment would be shown under investing Activity 111,000.00
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