A machine with a cost of $196,500,and a carrying value of $84,900,was sold at a loss of $13,700.This transaction would be reported on a statement of cash flows using the indirect format as a(n):

Question

Quizplus · Accepted Answer

The cash received from the sale is the carrying value minus the loss, which is $84,900 - $13,700 = $71,200, reported as an inflow from investing activities. The loss increases the net income in the indirect method, hence it's an addition to net income.

A Machine with a Cost of $196,500,and a Carrying Value