Horatio Corp. sold some of its plant assets during calendar 2020 for $ 21,000 cash. The original cost of the assets was $ 150,000, and the accumulated depreciation to the date of sale was $ 140,000. This transaction should be shown on Horatio's 2020 statement of cash flows (indirect method) as a(n)

Question

Quizplus · Accepted Answer

The sale of plant assets represents a cash inflow from investing activities, which should be reported in the statement of cash flows under that section.

The deduction from net income would be the difference between the sale price ($21,000) and the net book value of the assets ($150,000 - $140,000 = $10,000). Therefore, the correct choice is C: deduction from net income of $11,000 and a $21,000 cash inflow from investing activities.