Question

Innovativions Camera Co. sold equipment with a cost of $ 22, 000 and accumulated depreciation of $ 7,000 for an amount that resulted in a gain of $ 4,000. What amount should Innovativions report on the statement of cash flows as​ "proceeds from sale of plant​ assets"?

Answer 1

$19,000

Step-by-step explanation:

Investing activities: It records those activities which include purchase and sale of the fixed assets . The purchase is an outflow of cash and the sale is an inflow of cash

The computation is shown below:

= Cost of equipment - accumulated depreciation + gain on sale of equipment

= $22,000 - $7,000 + $4,000

= $19,000

The Cost of equipment - accumulated depreciation is also known as book value of equipment