Question

Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $12,120, and the accumulated depreciation on these fixtures is $7,802 at the time of sale. The fixtures are sold for $4,318. The value of this transaction in the investing section of the statement of cash flows is a. $15,604 b. $4,318 c. $12,120 d. $7,802

Answer 1

b. $4,318

Step-by-step explanation:

The cash flow statement shows the net movement in the cash balance at the start and end of the year as a result of the company's activities which are categorized into Operating , investing and Financing activities.

The investing section of the cash flow will only show the cash received ($4,318) from the disposal of the asset as an inflow.

Other elements such as depreciation and gain/loss on disposal would have been captured in the operating section.