Carlton Industries prepares its cash flow statement using the direct method.Carlton sold a piece of equipment used in their operations with a book value of $6,400 at a loss of $800.The amount to be reported on the cash flow statement under investing activities is:
A) $(6,400)
B) $800
C) $7,200
D) $5,600

Question

Quizplus · Accepted Answer

The cash received from the sale of equipment is calculated by subtracting the loss from the book value, which is $6,400 - $800 = $5,600. This is the amount reported under investing activities.

Carlton Industries Prepares Its Cash Flow Statement Using the Direct