Horatio Corp.sold some of its plant assets during calendar 2017 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 2017 statement of cash flows (indirect method)as a(n)

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Quizplus · Accepted Answer

When plant assets are sold, it results in a cash inflow from investing activities. However, since the assets were sold for less than their original cost, there is also a loss on disposal that needs to be accounted for. The loss on disposal is calculated as $150,000 (original cost) - $140,000 (accumulated depreciation) - $21,000 (proceeds from sale) = $11,000. This loss is deducted from net income in the operating activities section of the statement of cash flows using the indirect method. Therefore, choice C is the correct answer.