Question

Zenith corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $12,474, and the accumulated depreciation on these fixtures is $8,808 at the time of sale. The fixtures are sold for $3,326. What is the value of this transaction in the investing activities section of the statement of cash flows?

1) $3,326
2) $12,474
3) $8,808
4) Cannot be determined

Answer 1

The value of the sale in the investing activities section of the cash flow statement is $3,326, the amount received from the sale of the fixtures.

Step-by-step explanation:

The value of the transaction in the investing activities section of the statement of cash flows is the amount for which the fixtures were sold.

The acquisition cost and accumulated depreciation are relevant for determining the gain or loss on the sale but do not determine the cash flow amount. In this case, the fixtures are sold for $3,326, which is the cash inflow from the sale and the amount that would appear in the investing activities section of the statement of cash flows. Therefore, the correct answer is 1) $3,326.