Answer:
Add: $100,000 in net income in cash flow from operating activities.
Add; $400,000 in cash flow from investing activities.
Step-by-step explanation:
Sale of an equipment is a cash inflow from investing activity.
Here, the cash inflow will be total amount received on sale = $400,000.
Now since the book value of equipment was $500,000
There is a loss of $100,000 = $500,000 - $400,000 from such sale, such loss would have been shown as a deduction that is a debit item in net income, that $100,000 shall be reversed and added back to net income in cash flow from operating transactions.
Final Answer
Add: $100,000 in net income in cash flow from operating activities.
Add; $400,000 in cash flow from investing activities.