Question

Equipment which cost $446,000 and had accumulated depreciation of $248,000 was sold for $222,000. This transaction should be shown on the statement of cash flows (indirect method) as a(n):_________

Answer 1

Answer and Explanation:

The computation is shown below:

For profit or loss on the sale of an equipment

Cost $446,000

Less: accumulate depreciation -$248,000

Book value $198,000

Less: sold value -$222,000

Loss on sale of an equipment -$24,000

This amount would be added to the net income

And, the sale value i.e. $222,000 should be shown in the investing activity in a positive amount